New REIQ Residential Contracts for Queensland
On 20th of January 2022, the Real Estate Institute of Queensland will release new versions of the REIQ Contracts for House and Residential Land and Residential Lots in a Community Titles Scheme.
The changes to the previous versions include:
- relief to sellers and buyers due to a bank/financiers delay;
- smoke alarm law changes;
- minor changes to the pool safety certificate provisions;
- payment of deposit by direct debit; and
- seller warranties.
Relief to sellers and buyers due to a bank/financiers delay
A significant change is the additional protections for sellers and buyers due to a bank/financiers delay. This change will allow either the seller or buyer the ability to request a settlement date extension of up to 5 business days if their bank/financier is not ready to settle on the original settlement date.
This is a welcome change to the current version as it provides buyers and sellers some relief in the event their bank or financier is delayed.
Under the current version of the REIQ Contract, a buyer that is unable to settle on the settlement date will be in default of the contract. This means the seller may be entitled to terminate the contract, forfeit the buyers deposit (sometimes up to 10% of the purchase price) and sue the buyer for damages.
In the case of sellers, currently, if they can’t settle due to their banks delay, the buyer may be entitled to terminate the contract and walk away from the sale, meaning the seller may still have to pay the agent their commission (even though the sale didn’t go through), auction and advertising costs and start the whole selling process all over again. Possibly selling for a lesser price next time.
The other important changes include:
New smoke alarm clause 7.8 responds to changes to smoke alarm regulations on 1 January 2022. The current editions of the REIQ Contract Standard Terms and Conditions can continue to be used up to 20 January 2022, but the new clause will impose a contractual obligation on the seller to install smoke alarms in compliance with the new requirements
Payment of deposit by way of direct debit and grace period
There will be a new provision allowing the deposit to be paid by direct debit and a grace period given to address the impact of delays for deposits reaching bank accounts.
Pool Compliance Certificate
Amendments to the Pool Compliance Certificate obligations. A seller is required to hand over at settlement a Pool Compliance Certificate for a non-shared pool. The only exception to this obligation is if a Notice of No Pool Safety Certificate is given to the buyer when the contract is being entered into.
Under the new version, the seller will warrant they have not received communication from a competent authority (i.e Council) that may lead to the issue of a show cause or enforcement notice or a notice to do work. This clause has been inserted as Councils often communicate with sellers for a considerable time without actually issuing a formal notice to do work or rectify issues on the property. Under the current contract, if the Council is aware of a proposed sale, they may issue a formal notice resulting in the buyers being responsible for such works. This issue has been resolved by the inclusion of the new seller warranties.
Before you sign a contract, contact one of our Property Lawyers (yes, an actual qualified solicitor) at McLaughlin & Associates Lawyers to conduct a contract review. So, before you sign anything talk to one of our lawyers today. Do not hesitate to contact our friendly Property Law team on 07 3808 7777 or send us an email at firstname.lastname@example.org.