9# DIFFERENCES IN CONVEYANCING BETWEEN QLD, NSW & VIC
Australia might be one country, however there are substantial differences when it comes to the law around property transactions across the States.
1. WHO PREPARES THE CONTRACT OF SALE
In QLD, contracts are drafted by agents and while against our advice, parties often sign a contract without it being reviewed by a lawyer.
In NSW, a Seller cannot even list their property for sale unless a draft contract which includes all essential searches is prepared by their lawyer or conveyancer and provided to the agent.
Similarly in VIC, a Contract and the disclosure documents must be prepared by the Seller’s solicitor or conveyancer and provided to a Buyer before signing.
2. SELLER/VENDOR DISCLOSURE REQUIREMENTS
In NSW and VIC, a Seller must provide comprehensive disclosure documents to a potential buyer to review before signing, as opposed to QLD where the contract is limited to the standard terms and ‘Buyer Beware’. Note that it is likely to be only a matter of time before QLD will be transitioning to the Vendor Disclosure regime.
3. TIME OF THE ESESENCE, OR NOT
The most notable difference is that in QLD ‘time is of the essence’ – this means that the settlement date prescribed in the Contract is an essential condition and if you fail to settle on the agreed date, the Seller can terminate, keep the deposit and sue for damages or specific performance.
In NSW and VIC, contracts are not time of the essence, and the standard conditions have a 14 day notice to complete provision that provides that if either party does not settle on the due date, the other party must first serve a Notice to Complete giving them a further 14 days to settle. It is only at the end of the additional 14 day period that the Contract becomes ‘time of the essence’ which gives the innocent party a right to terminate.
4. CONTRACT ‘EXCHANGE’
As above, given the solicitors/conveyancers are involved in the contract preparation in NSW and VIC, they have an additional step in the conveyancing process of ‘exchange’, referring to the point in the process whether the contract has been agreed between the buyer and seller/vendor. The benefit of the NSW/VIC regimes are that all searches are completed prior to signing and any issues are generally thrashed out prior to contracts being exchanged.
5. COOLING OFF
All states have cooling off rights but different timeframes:
- QLD has 5 business days including the date the Contract is received;
- NSW has 5 business days from the date of exchange; and
- VIC has a three-business day period which starts from the business day after the Buyer signs the Contract.
Note that cooling off does not apply to auction contracts and there are some limited exceptions.
6. STANDARD SETTLEMENT PERIODS
The standard settlement period in QLD is 30 days from the Contract Date whereas NSW and VIC are generally longer at 42 days or more from the Contract Date.
7. INSURANCE REQUIREMENTS
In NSW and VIC, the Property is at the Seller’s risk up until the settlement date. In QLD, the Property is at the Buyer’s risk from 5pm the first business day after the Contract Date, even if the Contract is still subject to conditions. Thus, it important that buyers in QLD consider taking out insurance as soon as they sign a contract.
8. ABILITY TO NOMINATE
In VIC, a Buyer can nominate an alternative Buyer to settle a contract, whereas in NSW and QLD, this may trigger double transfer duty.
9. QUALIFICATION REQUIREMENTS
In QLD, conveyancing must be carried out/supervised by a qualified solicitor whereas in NSW and VIC, licensed conveyancers can complete the work.
