What does the new REIQ Contract mean for you?

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From 20 January 2022, the industry-standard contracts used in Queensland for residential sales and purchases were updated by the REIQ. We’ve provided a summary of the changes as follows:

Conveyancing – Property Settlement Extensions

Previously, in Queensland, contracts were required to settle on a specific date, unlike most other Australian states, which already offered a grace period. Many recent instances have been reported in Queensland where the Buyer was unable to settle on time due to their financier being unable to provide funds at Settlement. 

Australians were outraged at the story of a young couple, Mark Trau and Maddie Goyder, who had been saving for their house deposit for ten years. They lost the entire $75,000.00 deposit due to their bank not being ready on time and the Seller refusing to grant a 24-hour extension. 

Whilst the couple were luckily compensated by their financier, to remedy this formally, REIQ, in conjunction with the Queensland Law Society, introduced the new Clause 6.2. This Clause now entitles both parties to an automatic Property Settlement extension of up to 5 business days from the original Settlement date. 

The request for this extension must be made on or before 4.00 pm on the original Settlement date. This extension will be arranged via communications between your Solicitors, and no reason or proof is required to receive this entitlement. Both parties are entitled to as many extensions as they wish within these five days (e.g. extend by one business day five times). However, if Settlement is not completed by 4.00 pm on the 5th business day, the other party will be able to terminate. 

Conveyancing – Contract Date

The definition of Contract Date has been amended to allow electronic signing of contracts. 

Conveyancing – Pool Compliance 

A seller is now required to provide a pool compliance certificate for a non-shared pool on or before Settlement unless a Notice of No Pool Safety Certificate has been given to the Buyer prior to Contract. 

Conveyancing – Smoke Alarms 

New smoke alarm regulations were introduced in Queensland on 1 January 2022. To create contractual obligations, the new Clause 7.8 requires the Seller to install smoke alarms in compliance with the new regulations. Should smoke alarms not be compliant, the purchaser can request, on or before Settlement, an adjustment of 0.15% of the purchase price in their favour. 

 

Conveyancing – Grace Period for Direct Deposits

It is common when transferring large sums of money, such as a house deposit, for banks to take 2-3 business days to clear funds. A new provision allows a grace period to account for any delays when using direct debits, as long as written proof can be provided that the transfer was actioned before or on the due date. 

Conveyancing – Seller Warranties

Often local governments correspond with owners for a while without issuing a formal non-compliance notice. Once the council discovers the property is for sale, they tend to issue a formal notice, which previously under Clause 7.6 would become the Buyer’s responsibility. 

This provision is an unfair burden on the Buyer; as such, the Seller is now obligated to warrant that they have not received communication from a relevant authority that could result in a notice under Clause 7.6. 

Further changes have been made to Clause 7.6 to change the responsibility for notices to do work depending on: 

  • Whether the notice was issued prior to or after the Contract; 
  • Whether compliance is required before or after Settlement; and 
  • Whether the notice was disclosed to the Buyer prior to Contract. 

Conveyancing – New Right to Terminate

The Buyer now has a new right to terminate under Clause 7.5 if an infrastructure passes through the land and is not protected by a registered Easement, BMS, or Statutory Authority, that has been disclosed to the Buyer. 

Note: This does not include infrastructure related to the land or delivery of services like gas, water, electricity and sewage. 

Ultimately, this is a win for the Buyers with further property standards and protections against delays outside of their control.

Should you intend to enter into a Contract to Buy or Sell, we encourage you to seek legal advice before signing. To do so, please contact our conveyancing team to determine your rights and obligations.

If you already have a signed Contract and are looking for a stress-free Settlement, call us at (07) 3034 3888 for a fixed-fee quote or email your Contract to info@stephenstozer.com.au.

Caitlin Baird is a Paralegal at Stephens & Tozer who undertakes the legal aspects of buying and selling properties for her clients, providing assistance throughout the conveyancing process. If you are buying or selling property, contact the conveyancing team at Stephens & Tozer today.

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