In Queensland the controversial terms of contract that allowed property Sellers to keep the deposit of Buyers if settlement is not completed has now been changed. The REIQ has initiated the introduction of a new terms of contract in the standard REIQ contract used in Queensland.
Originally all REIQ contracts were considered to be ‘time of the essence’ meaning that all conditions of the contract must be fulfilled by the agreed upon times and dates as written in the signed contract.
Previously any changes or extensions to these conditions were subject to approval by all sides in writing.
This new change now allows both sellers and buyers to extend settlement deadlines by 5 business days if they are delayed by their financier without the agreed upon written approval by all sides.
WHY DO BUYERS LOSE THEIR DEPOSITS WHEN A CONTRACT IS TERMINATED?
In the past if the financier or bank were unable to provide funds to the Buyer to complete settlement it meant that they were legally in breach of the terms of the contract. The Buyer therefore was at risk of being financially liable to Seller who could terminate the contract and collect the deposit of the Buyer and also sue the Buyer for any loss on the resale of the property and other damages.
WHAT TO KNOW ABOUT THE DEPOSIT WHEN BUYING A HOME IN QUEENSLAND?
Here are FIVE KEY POINTS to know about your DEPOSIT when buying a home:
- the amount is not usually a percentage of the purchase price but is negotiated between the parties
- it is payable to the seller upon settlement
- if the contract involves an agent they usually hold the deposit in their trust until settlement
- if you have any questions relating to the finance clause of your contract consult with our conveyancing specialists to ensure you understand the terms of the contract
- not all contracts are subject to finance terms and conditions but are agreed upon before the contract is signed by the Seller and Buyer
IF A CONTRACT FAILS CAN THE SELLER STILL KEEP YOUR DEPOSIT?
If the Buyer breaches the terms of the contract the Seller may claim the deposit.
WHICH HOUSE CONTRACT VERSION DO I HAVE?
It is essential to talk with your appointed conveyancing solicitors to know if you are covered by the new REIQ provisions depending upon the version of the REIQ contract that you are signing.
The Seventh Edition is the current REIQ contract for Houses and Residential Land.
The Thirteenth Edition is the current REIQ contract for Residential Lots in Community Title Schemes.
THE NEW PROPERTY LAWS IN QUEENSLAND TO KNOW IF YOU’RE BUYING OR SELLING
There have been more than one change in 2022 to Queensland House and Land Contracts after revision by the REIQ (Real Estate Institute of Queensland) in 2021. Generally it can be said that the terms of the standard contract has been changed to further protect all parties from the financial risks of a terminated contract as a result of time sensitive conditions.
Conveyancing is essential to the process of buying or selling house and land in Queensland. If you are about to sign a contract or need help with your conveyancing call 07 3013 2300 or email our friendly River City Conveyancing team firstname.lastname@example.org