This advice is based on the REIQ Terms of Contract and applies to Queensland law only. It is intended as a guide only, individual facts and problems may greatly effect your rights and so you will need to consult a lawyer should you require legal advice. If you have any doubts you should see a lawyer before you sign the contract.
BEFORE YOU SIGN THE CONTRACT
Make sure you want to buy that property. If you sign a contract this is an offer to buy on those terms and if the vendor signs the contact the contract is binding on both parties. You cannot cancel the contract if you change your mind (unless within 5 days of the contract) or something else comes up that is not provided for in the contract.
The standard contract is not subject to satisfactory flood or mining searches. If you have any of these concerns then you will need to either check these out before signing or make the contract subject to satisfactory flood and mining searches before you sign it.
If you are obtaining finance or wish to have the building checked by a building inspector then the
relevant provisions of the contract will need to be completed in full.
You should also ensure that the details of the lawyer of your choice are completed on the contract.
5 DAY COOLING OFF PERIOD
You have 5 days to change your mind after the Contract (signed by all parties) is delivered to you or your lawyer.
Unlike other provisions you need no reason to cancel the contract under this provision. However, you should really want to cancel the contract because you may lose .25% of the TOTAL purchase price, not just the deposit you paid.
If you have some question as the value of the property then you should obtain an independent valuation. You should ensure that you choose someone trustworthy for this valuation as others may mislead you in an effort to gain a benefit for themselves if your contract falls over.
FINANCE CLAUSE (IF COMPLETED)
Under the contract the buyers are required to immediately make an application for finance to the financial institution named in the contract for the amount shown or else the buyer can be in breach of the contract.
Until this condition and any other special conditions are met the buyer may not be completely bound by the contract. However, the buyers are required to use their best endeavours to obtain finance and comply with the other conditions. If the buyers do not obtain finance then they must give written notice to the vendor by 5 p.m. on the finance date that they wish to cancel the contract. If this notice is not given then the vendors may terminate the contract at any time up to settlement even if notice of finance approval is given at a later date. It is imperative that if finance is not obtained on time that an extension is obtained to preserve the buyer’s rights.
Once finance is approved then the contract is unconditional in that regard. Should your circumstances change after finance approval, for example loss of employment, the buyer is still bound to complete the contract. The buyers may approach the sellers to be released from the contract, however, it is up to the sellers to agree to this. The sellers can (amongst other things) forfeit the deposit and sue for the lost on the sale if the property is later sold at a lower price.
BUILDING & PEST REPORT (IF COMPLETED)
The buyers must obtain such report by the date specified in the contract. If the buyers are not satisfied with the report then they must cancel the contract in writing by 5 p.m. on the Building Inspection Date.
If this notice is not given then the sellers may terminate the contract at any time up to settlement even if notice of a satisfactory building & pest report is given at a later date. It is extremely important that if a building & pest report is not received in time that an extension is obtained to preserve the buyers’ rights.
The buyers must act reasonably in canceling the Contract under this provision and the sellers can request the buyers to provide a copy of the building report.
If the buyers are not satisfied with the inspection then strictly speaking there is no right under the contract to renegotiate the price or have the sellers preform rectification work as all the contract provides is the buyers are entitled to cancel the contract. The buyers may ask the seller to reduce the purchase price or perform rectification work but these negotiations must be agreed in writing prior to 5 p.m. on the Building Inspection Date. If no agreement is reached and the buyers do not cancel the contract by the given time then the seller may cancel the contract.
WHAT WE DO ON YOUR BEHALF
We conduct the following searches:
(a) Titles Office
– to obtain print out of the title search and a copy of the plan of subdivision. If any encumbrances or easements are disclosed by the search then it may be necessary to search these and this will involve extra fees being the outlays incurred. A further Title search is conducted on the settlement date to ensure nothing has happened to the title since the first search;
(b) Land Tax
– to check if there is land tax owing or if money should be paid for land tax at settlement. Land Tax is usually not a problem if you are buying a house to live in. If you are buying land or houses for investment then you could be subject to Land Tax and you may have to lodge a land tax return each year;
(c) Main Roads Department
– to ascertain if there are any proposed resumptions of the land or part of it for the widening of any roads;
(d) The Local Authority
– this search is only a search of council records and does not include a compliance inspection of the property to discover if the vendors(or others) have performed illegal construction work on the land or done any other illegal things. If you suspect that there may be some problem with the building then you should arrange for an inspection by a Registered Builder. However, unless the contract is subject to a building inspection report, the buyer may not be able to cancel the contract. If there is a water meter on the property it may be necessary to obtain a water meter reading to enable an adjustment to be made at settlement. There is an extra fee payable to the council for this.
If, as at the date of the contract:
- The Present Use is not lawful under the town planning scheme;
- The land is affected by a proposal of any competent authority to alter the dimensions of any road or railway abutting the land;
- access or any service to the land passes unlawfully through other land;
- any competent authority has issued a current notice to treat or notice of intention to resume regarding any part of the land;
- The property is classified under the Contaminated Land Act or has been used for a prescribed purpose under the Regulations of that Act and is not a former or released site; or
- The property is affected by the Queensland Heritage Act or is included in the World Heritage List and these are not disclosed on the Contract, the Purchaser may terminate the contract by notice in writing to the Vendor given at least 2 business days before the settlement date.
- We do not conduct all these searches, however, if matters in the surrounding area of the property warrant extra searches then if the buyers consider necessary to do any or all these searches written instructions will be required as to those searches required.
Transfer documents are submitted to the sellers to convey the land to the buyers. If the land is to be transferred into more than one name, the buyers will have to nominate the method of ownership that the documents are to be prepared in. The contract and transfer documents are then stamped and the appropriate stamp duty is paid, this is done by arrangement with the Office of State Revenue in our office and the stamp duty is remitted to the Office of State Revenue so it must be paid to us before settlement.
Settlement agents are arranged to attend settlement on your behalf. Buyers do not attend settlement as they will usually be too busy moving. At settlement the balance purchase moneys are paid to the vendors plus or minus release of mortgage fees, rates, water charges, rent and land tax adjustments.
If the rates have been paid by the seller for the current assessment period then the buyers pay to the sellers an amount for the rates from the date of possession (this is usually the date of settlement but under some contracts the date of possession is deemed to be the date of the contract) to the end of the assessment period. If the seller has not paid rates for the current (or any previous) assessment period then the sellers’ share of rates to the date of possession will be deducted from the balance purchase moneys. The buyers then have to pay the rates on the land to the Council (including any arrears). What is generally done is that a cheque is drawn at settlement for the rates up to the end of the rates period and the buyer’s lawyer sends this to the Council.
Physical possession of the property is handed over which is usually signified by the handing over of the keys. The contract makes specific provision for the handing over of keys, however, because of practical aspects it is best to have the vendor leave the keys at the agents’ office and the buyer collects them from the agent after the agent has been notified that settlement has been effected. Under the contract keys include keys to and electronic devices for all doors, grilles, shutters, lifts, the term also includes codes and combinations to locks to doors and any security system on the premises. The seller must provide these codes and combinations in writing to the buyer at settlement.
If buyers did not obtain finance or the financial institution does not take security over the property purchased, we register the title in the buyers’ name with the Titles Office. Unless you request it the Titles Office does not issue actual Certificates of Title but forwards to us a Registration Confirmation Statement which shows that the buyers are registered as the owner of the property. Should the buyers wish to obtain a Certificate of Title, we must prepare an Application for Title for signature and this is lodged with the transfer. The cost of preparing this form is $132.00 and therefore our fees would be increased by this amount.
If buyers do not request that a Certificate of Title issue then the title lies in the Titles Office and should owners wish to mortgage, sell or otherwise deal with the property sufficient proof of identity must be produced to the bank or person who witnesses the owners’ signatures to ensure that the property is not dealt with fraudulently.
A search of the title held by the Titles Office shows if a deed has been issued and if one has been so issued, it must be produced upon any further dealing with the property. Provided the property is not subject to mortgage or a similar charge owners may make an Application for Title at any time.
The Local Authority, the Valuer-General’s Department and the Commissioner for Land Tax are notified of the purchase. All notices from these bodies relating to the property will be addressed to you at the address that you fill in on the Authority to Act given to us so please ensure that this address is correct.
Should owners change their address at a later date then they will have to notify these departments themselves so that they will be able to contact owners at the new address. This especially applies where vacant land is purchased, a house is built on this and then the owners move into this house. If notice is not given to the Council then rates notices are posted to the old address and arrears accumulate.
WHAT WE DO NOT DO ON YOUR BEHALF
We do not conduct searches in relation to services supplied to the property thus buyers should contact the relevant electricity board, phone company, gas company and all other bodies supplying or maintaining existing services and any services they wish to rely upon in the future to ensure that these bodies have no monetary or other requirements which must be attended
to before the service will continued or commenced.
We do not search the Foreign Ownership of Land Register which shows if proceedings have been commenced under the Foreign Ownership of Land Register Act in relation to the property which could lead to its forfeiture to the government.
We do not conduct a building compliance inspection search with the Council, flood search, Mines Department search, electricity authorities or Railways Department search, nor do we search the Contaminated Land Register.
Any or all of these searches can be conducted at written request but extra fees and outlays will be incurred and will need to be added to the costs. Some financial institutions require that buyers provide them with copies of these searches.
Under the contract it is the buyers’ sole responsibility to identify the property, to ensure the boundaries of the property are correct, that any survey pegs are correctly positioned, that no improvement situated on the land purchased encroach on any adjoining land or are so close to the boundary as to contravene the requirements of the local authority or any buildings on surrounding lands do not encroach on the land being purchased. Solicitors are not qualified to verify these points but the assistance of a surveyor should be sought if there are any concerns. We will obtain a copy of the registered plan of the land from the Titles Office which can be used to identify the land and can be provided to a surveyor.
If it is intend to use the property for other than residential purposes then please advise us so that we can make sure that the proposed use will not infringe the Local Authority’s by-laws or any special restriction that may be attached to the property.
Full insurance should immediately take out on all improvements on the property as under the contract the property is at the buyers’ risk from the next business day after the date of the contract. Normally a cover note from an insurer will suffice and is usually only a telephone call away.
All chattels included in the sale should be correctly described in the contract. Immediately prior to settlement a check of the condition of the property should be conducted to ensure that the sellers have moved out of same, that the seller has not taken goods that are supposed to be left behind and that the house is left neat and tidy.
If you have any questions or would like to speak with a GLG Legal Springfield representative regarding our service, please contact us.