New Standard REIQ Contracts in Queensland
New editions of the Contract for Houses and Residential Land (17th ed.) and Contract for Residential Lots in a Community Title Scheme (13th ed.) are to be released on 20 January 2022 by Queensland Law Society and the Real Estate Institute of Queensland. Whilst the updated Queensland Law Society and REIQ contracts are yet to be released, a summary of the most significant changes are set out below:
Extension of settlement date
Of most interest, either party may obtain a short extension of the settlement date if they are unable to settle due to the action or delay of a financier or for any other reason. This amendment has come about due to some Buyers being unfairly disadvantaged when their financier was not ready for settlement, and the Seller terminated the Contract on them and forfeited the deposit.
If a party is unable to settle, they can serve an Extension Notice nominating a new date for settlement up to 5 business days after the Scheduled Settlement Date. The Extension Notice must be given in writing prior to 4pm on the Scheduled Settlement Date and must nominate a new settlement date and time is of the essence. More than one Extension Notice may be given, provided the settlement date nominated is no later than 5 business days after the Scheduled Settlement Date.
At this stage, it appears that neither party has to supply supporting evidence to claim the settlement extension.
Buyers should be aware that if a Seller is not in a position to settle on time, they may be entitled to a buffer of an additional 5 business days and as such, a Buyer should factor this in when arranging removalists and a ‘move-in’ date.
Payment of deposit grace period
Payments of deposits are generally made by direct debit.
Under the new provisions, a Buyer who pays a deposit by direct debit is taken to have paid the deposit on the day the Buyer effects an electronic transaction to pay the deposit. The Buyer will need to provide evidence of the payment (eg. copy of the receipt) to the Deposit Holder and must not take any action to delay the payment. This provision will apply irrespective of when payment is received.
If the deposit is not received by the due date in the Contract, the Seller may give a notice to the Buyer requiring payment within 2 business days. If payment is not received within that time, the Buyer will be in breach and the Seller may terminate the Contract.
This amendment is welcomed to deal with delays associated with electronic payments and innocent mistakes where a Buyer may accidentally transfer the deposit to the solicitor’s trust account instead of the agent’s trust account for instance.
Smoke alarms
If you enter a Contract to sell or lease a property from 1 January 2022, you are required to have hardwired, photoelectronic, interconnected smoke alarms. See: https://www.maplawyers.com.au/smoke-alarms-new-rules-from-january-2022/ for more information.
The REIQ Contract has been amended to impose a contractual obligation on the Seller to install compliant smoke alarms prior to settlement. If smoke alarms are not installed, the Buyer will be entitled to an adjustment at settlement in the Buyer’s favour of 0.15% of the purchase price.
The Buyer will be entitled to access the property to inspect the smoke alarms. If they are not installed, the Buyer will need to claim the adjustment prior to settlement. There is no right to terminate or claim damages from the Seller.
Pool compliance certificates
The new REIQ Contracts impose an obligation on the Seller to provide a pool compliance certificate for a non-shared pool at settlement unless a Notice of No Pool Safety Certificate is given to the Buyer prior to the Contract. If the Seller fails to provide a pool compliance certificate, the Seller will not be ready, willing and able to settle and accordingly, the Buyer will have a right to terminate the Contract.
As a Seller it is therefore critical to either:
- ensure the pool safety certificate is current and provided prior to settlement; or
- if you know the pool safety certificate is not current and you are not willing to obtain a certificate prior to settlement, that a Notice of No Pool Safety Certificate is provided prior to the parties signing the Contract.
New Seller Warranties
Importantly, the new Contracts will provide for a Buyer’s right to terminate if a show cause or enforcement notice has been served and remains unsatisfied at the Contract Date.
The Seller must also disclose if at the Contract Date, they have received communications from a competent authority (eg. Council) that may lead to be issue of a show cause or enforcement notice or a notice to do work on the property.
Services passing through the land without an easement
The Buyer may have a right to terminate if there are services infrastructure running through the land that are not protected by a registered easement, Building Management Statement or statutory authority that has not been disclosed to the Buyer. This right does not however apply to infrastructure related to the delivery of services (eg. gas, electricity, water, sewerage, telecommunications) to the property.
We welcome these amendments and look forward to reviewing the new versions in detail once released.
Need Help Managing Your Property Agreement?
Legal documents, such as the Queensland Law Society and REIQ contracts, can take effort to parse. Reach out to a conveyancing lawyer from MAP Lawyers for assistance! We are here to ensure you fully understand your rights and obligations. Whether you need a solicitor for selling or buying a house, reach out to our team of experts today by contacting us online or calling 1300 680 584.
Updated: 13/02/2023
