Does a Queensland Contract need to be reviewed before signing?
The standard purchase and sale of a residential Property in Queensland will usually be evidenced by a standard Real Estate Institute of Queensland (REIQ) Contract or its equivalents. Whilst these sort of Contracts contain standard terms, it is important that you have a qualified conveyancer or solicitor review it before signing to confirm that the Contract has been completed properly. This is especially important if the Seller has included additional Special Conditions in the Contract.
Are verbal agreements surrounding the signing of the Contract binding on the parties?
The standard position to take is that nothing is binding between the parties unless it has been clearly written inside a duly completed and signed Contract. Hence, the best practice is to engage a solicitor to draft the appropriate clauses reflecting the parties’ verbal agreements and include same within the Contract before it is signed.
What are chattels and do I have the right to retain them at Settlement?
Chattels are goods that you may see in the Property during your pre-Contract inspection. They are ordinarily not sold or retained by Purchasers at Settlement. If you want to retain the goods at Settlement, you will need to include a list of the relevant items within the Contract.
The standard REIQ Contract used in most purchase and sale of residential properties have provisions for “excluded fixtures” and “included chattels”. Inclusion of the relevant items in the “included chattels” section of the Reference Schedule of the Contract will ordinarily be sufficient for this purpose.
What is the cooling off period?
The cooling off period is a time period within which you can choose to exit from the Contract without providing the Seller with any reason. It is a right that you have as a Purchaser. However, please note that the Seller has the right to claim 0.25% of the Purchase Price offered from you as penalty for exercising your cooling off right.
The standard cooling off right in Queensland is 5 business days from the day that you or your Solicitor/Conveyancer receive the fully signed Contract.
What sort of conditional clauses can you negotiate into the Contract in Queensland?
Many Contracts in Queensland purchases are made subject to Finance, Building and Pest Inspection and/or Due Diligence. The standard practice in Queensland is for Sellers to allow Buyers the opportunity to complete their due diligence in relation to the Property before they proceed to Settlement. If you have not had the chance to complete your due diligence before you sign the Contract, it is recommended that you make a conditional offer to allow you the opportunity to satisfy yourself of any queries or concerns before you approach Settlement.
How can I make the Contract subject to Finance?
The standard REIQ Contract already contains adequate protection for Buyers wanting to make the Contract subject to Finance approval by their financier. You only need to ensure that the Finance section of the Reference Schedule is completed in full. Please note that if this section is not completed properly then the Contract will not be subject to Finance. Hence, it is important that you engage a Solicitor and Conveyancer to confirm that the Contract has been completed correctly by the Seller’s agent before signing.
How much Deposit should I pay under a Contract?
The amount of Deposit is dependent on the parties’ agreements. The standard Queensland practice is that the Deposit is payable in two lots. An Initial Deposit of a nominal amount is usually paid upon signing of the Contract by the Buyer, with a Balance Deposit due upon the Contract becomes unconditional or at a later agreed date. The Deposit is often viewed as a way of gauging a Buyer’s interest in the Property, hence, many Buyers will offer a total Deposit of 5 – 10% of the Purchase Price. However, it is ultimately based on parties’ agreement so you may want to discuss with the Seller how much Deposit they are looking for and go from there.
Why do I need to buy insurance for a Property prior to Settlement?
As a Buyer, the Property becomes at your risk from 5 pm the second business days after the Contract Date. Although the Seller does have the responsibility to look after the Property during the Settlement period, it is in your best interest to purchase insurance so you can be certain that a third party will step in to protect you should any misfortune befall the Property, reducing the risk you carry as well as potentially eliminating the need to spend time, money and effort in a dispute with the Seller closer towards Settlement.
What sort of insurance cover should I purchase?
The usual form of insurance purchased by Buyers prior to Settlement is Building Insurance. If you are purchasing an existing residential standalone house, then the standard Building Insurance including public liability protection should suffice. If you are purchasing from a strata scheme, then the body corporate should maintain strata insurance over the Property and any common properties, eliminating the need for you to obtain your own Building Insurance.
Whilst Building Insurance is important and common, it is not the only form of insurance you may need to adequately protect yourself. Hence, you should consult a qualified Conveyancer or Solicitor to discuss your particular circumstances to confirm if you need to purchase any other forms of insurances.
What is Settlement?
Settlement is the day and time where all the relevant parties to a transaction come together to exchange documents for payment in the form of bank cheques. Most Settlements are conducted by representatives of the parties on either side so there is no need for the Sellers and Buyers themselves to attend in their personal capacity.
Once Settlement has occurred successfully, you should be duly notified as it is the point when the Property legally become yours.
What is Registration of Transfer?
Registration of a Transfer and other title documents is an event that occurs after Settlement and is usually completed by your financier or conveyancer (if you do not have a financier). Once completed, the Property will be officially recorded on the Land Register, as proof and declaration to the world that you are the owner of the Property.