Buying or selling residential property in QLD…the devil is in the detail. [Part 2]

February 14, 2024

When you are looking at buying a residential property in Queensland, most sales contracts are prepared using a standard REIQ contract. However not all buyers (and sellers) have similar requirements and not all properties are the same – so there are times when special conditions are required.

This is part 2 of our series on standard conditions and some of the more common special conditions which are included in a QLD residential contract.

Council approvals

Generally, a buyer will have no right against the seller if the property includes un-approved additions, e.g. extensions, garages or sheds.

If a buyer is concerned that parts of the property are not approved, a special condition may be included to give the buyer time to make enquiries with the local council.  The special condition would allow the buyer to terminate the contract and recover the deposit if non approved building works were discovered.

Subject to Sale

If a buyer is relying on the sale of another property to complete a purchase, the contract may include a special condition which makes the completion of the purchase contract conditional on the sale of the buyer’s other property. This would allow a buyer to exit their purchase contract and recover the deposit if they are unable to sell their property in time.

Subject to Registration of Title in Seller’s Name

In some cases, in particular if selling on behalf of a deceased estate, the property may not yet have been transmitted to the actual owner of the property.

In these cases, a contract for sale can still be signed but include a condition making the property sale subject to the prior registration of the property into the seller’s name.

Cleaning

While a seller will normally leave the property in a clean and tidy state at settlement, it is not a legal requirement that the seller must do this.  If a buyer is concerned that a property may be untidy, dirty or covered in debris or abandoned items, the buyer can require a cleaning clause to be inserted in the contract obligating the seller to arrange for the property to be professionally cleaned before settlement.

A well drafted special condition will also specify what rights the buyer has if the cleaning is not done.

Property at Seller’s risk until Settlement

The REIQ contract provides that the property is at the buyer’s risk from 5pm on the next business date after the contract is signed. That means the buyer must still settle the contract and pay the full price, notwithstanding the property has been damaged after the contract is signed.

If there is an extended period of time until settlement, a buyer may request a special condition be included where the parties agree that the property remains at the seller’s risk until settlement, or until the contract is unconditional.

Cooling off period

Although not technically a condition, a cooling off period allows a buyer to pull out of a contract for any reason within five business days of receiving the signed contract. In such circumstances the seller will have the right to charge a cooling off penalty equivalent to 0.25% of the purchase price.   This cooling off period applies to most residential contracts but not if the home was sold at auction or if the buyer has waived the cooling off period.

It is important that you have a detailed discussion with your solicitor or conveyancer about the property, your intended use and any concerns you have, before you sign the contract, so that the necessary special condition can be included in the contract.

If you have any questions about contract conditions or special conditions, contact our residential conveyancing team.

If you missed part 1 of our series, you can catch up here.