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.
5 DAY COOLING OFF PERIOD
Under the contract the buyers have 5 days after the date the fully signed contract is delivered to the buyers or their solicitors to change their minds. Unlike other provisions of the contract they need no reason for this.
If the buyer cancels the contract because under these provisions then you may forfeit .25% of the TOTAL purchase price, not just the deposit the buyers have paid. There may be practical problems with collecting this money and if they refuse to pay this then all you can do is sue them which may not be worth it.
FINANCE CLAUSE (IF COMPLETED)
If the contract is subject to finance or other conditions then until these are met the buyers 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. Notice in writing must be given to your lawyer by 5 pm on the finance date that the purchasers cancel the contract if the purchasers have been unable to obtain finance. If the purchasers do not give the required notice of approval of finance then the sellers may terminate the Contract and sell the property elsewhere.
BUILDING & PEST INSPECTION (IF COMPLETED)
Notice in writing must be given to the sellers or their lawyer by 5 p.m. on the date for the building & pest inspection that the buyers cancel the contract if they are not satisfied with the building & pest inspection. The buyer must act reasonable in canceling the contract under these provisions and the seller is entitled to a copy of such report.
If the purchasers do not give the required notice by 5 p.m. on the due date then the sellers may terminate the Contract and sell the property elsewhere.
If the buyers are not satisfied with the report then there is no provision in the contract for the buyers to ask for a reduction in the price or that the seller perform rectification work on the property. It may be that the buyers try to negotiate these but if written agreement is not reached by 5 p.m. on the due date then the sellers can cancel the contract.
WHAT WE DO ON YOUR BEHALF
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 before the earlier of 28 days after the contract date or 2 business days before the settlement date.
– The contract also provides that if before the date of the contract the Local Government has given you or some other person:
– a notice in writing to perform work on the building so as to bring it to conformity with the Building Act where the building was erected without approval or not in accordance with the Plans and Specifications approved by the Council;
– a notice to make application to the Council for approval of works which were erected without a Council permit;
– a notice requiring the performance of work or to demolish buildings that have become dangerous either through neglect or by act of nature,
– and that the notice is current as at the date for completion the purchaser may by notice in writing to you or to our office, given on the day for completion, terminate the contract.
– We ask that you advise us immediately if you are aware of anything that may give rise to problems in any of the above areas.
– Under the terms of the contract Requisitions on Title have been abolished and instead you give certain statements which if not accurate entitles the Purchaser to terminate the contract.
These statements are that as at the date of the contract:-
– You have free and unqualified capacity and power to contract and to complete the contract;
– You are not under any legal disability which affects your capacity to contract and complete the contract;
– If you are a Trustee you have free and qualified power of sale under the instrument creating the trust and that instrument does not require the consent or authority of any person to the entering into of the contract or completion of the contract.
These statements must be true as at the date of you signing the contract.
Further statements in the contract apply as at the date of completion unless excluded in the contract and these statements are:
– There is no current litigation by any person claiming under estate of interest in the property;
– There is no unsatisfied Judgement, Order or Writ of Execution which affects the property;
– No order has been made by a Court in relation to encroachment or mistake which would operate as a charge on the land;
– There is no order for Court or other competent authority affecting your ability to complete the contract;
– No notice has been issued by a competent authority or proceedings instituted in a Court pursuant to any statute whereby your interest in the property may be rendered liable to forfeiture to the Crown (for example the Foreign Ownership of Land Register Act which requires that should you be a foreign person then you have to register this fact)
– If the land is Crown Leasehold Title this is not liable to be forfeited by reason of the non observance or non performance of the covenants or conditions of the Lease;
– If you are a natural person you are not a bankrupt nor have you signed any authority under the Bankruptcy Act whereby your ownership of the property is effected;
– If you are a Company then you are not in liquidation, no action has been taken by or against you which lead to the winding up of the Company, you are not under official management, an administrator, controller or managing controller has not been appointed to the Company in respect of the property and no compromise has been entered into with creditors; and
– You are the registered owner or the registered lessee of the property.
– The purchaser can request that you provide them with copies of all unregistered documents relating to the property and full and proper details of all unregistered dealings that relate to the property and deliver to the purchasers photocopies of any documents certified as being true copies.
– Given the above we would ask that you advise us if there are any matters that should be brought to the attention of the Purchasers and if so what steps have been taken to rectify the situation prior to settlement.
– If you hold the Title Deed yourself or if it is in a bank for safe custody, you should bring this to us as soon as possible. Sometimes there are still Mortgages registered on the Deed and you will need to bring the Release of Mortgage and any Duty Form to us.
– If your Deed is held for security of a loan then we make arrangements to payout any mortgages etc. held by the bank, building society or the financial institution that holds any mortgages or other security over the property you are selling. Sometimes you may have more than one mortgage or a caveat over the property. If you have received any notices from any financial institution or from the Titles Office telling you that there is some document lodged or registered on the land you should advise us immediately.
– We arrange transfer documents to convey the land to the purchaser. You will need to sign these documents and your signature must be witnessed by a Solicitor or Justice of the Peace. We can assist you in this regard, however, if you are unable to come to our office we will forward these to you and advise you how to sign them correctly.
– We arrange with the solicitors for the purchasers and the financial institution that has your Mortgage or other security for settlement. These include place, time and date and the actual figures and how to draw cheques.
We arrange for settlement agents to attend settlement on your behalf and there is no necessity for you to do so as usually you will be too busy packing and moving. The balance purchase moneys are paid by the purchaser plus or minus adjustments.
One of the major adjustments is the rates on the land. If the rates have been paid for the current assessment period then the purchasers have to pay to you an amount for the rates from the date of settlement to the end of the assessment period. If you have not paid rates for the current assessment period your share of rates up to the date of settlement will be deducted from the balance purchase moneys you receive and a cheque is drawn to the Council to pay the rates.
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 leave the keys at the real estate agents’ office and the purchaser can collect the keys from the agents after they have been notified that settlement has been effected.
Under the Contract “keys” include keys to and electronic devices for all doors, grilles, shutters and lifts, the term also includes codes and combinations to all locks and any security system on the premises. You must provide these codes and combinations in writing to the purchaser at settlement. If applicable, could you please provide us with these details immediately.
At settlement the financial institutions that hold security over the land will receive the amount owing to them. Unless you direct otherwise we will receive the balance of sale proceeds, deduct our fees, pay the agent any commission owing to them and forward the balance to you, this is usually posted to you on the next working day after settlement. If you wish to make other arrangements please give us written directions as to what you want us to do.
If a real estate agency is involved in the transaction you will be liable to pay commission to them on a Government fixed scale unless there is a special arrangement to the contrary. You should notify us of any special arrangement concerning payment of commission. We notify the real estate agency of settlement and obtain the balance of the deposit from them unless they did not obtain sufficient deposit to cover their commission, in which case we deduct the balance commission owing from the sale proceeds and send it to them.
You should continue your insurance on any improvements on the property. Under the contract the property is at the purchasers’ risk from the next business day after the contract date. However, it is best to continue insurance just in case there are problems or the contract does not proceed.
You should make sure that any goods and chattels included in the sale are correctly described in the contract.
It is unwise to allow the purchaser to have possession of the property prior to settlement. Should you give the purchasers possession of the property prior to settlement please advise us immediately of the date of such possession and any conditions that you imposed upon the purchasers obtaining possession.
Unless otherwise agreed each party bears the expense of their own solicitor’s fees and outlays incurred. The contract provides that the purchaser is to pay Transfer Duty which is a state government tax. However, the Duties Act provides that if the purchaser does not pay Duty then the Office of State Revenue can obtain stamp duty from the seller who must then sue the buyer.
If you have built your own home or had any building work performed on it to a value of $6,000.00 or more by an unregistered builder in the last six years then you cannot sell the property without the consent of the Building Services Authority. The consent of the Authority should have been obtained before you entered into the Contact and a notice should have been delivered to the purchaser before they entered into the contract. If you have not complied with these requirements the purchaser is entitled to cancel the contract and you should advise us if there are any potential problems in this regard.
If you have a copy of the contract when you bought the land you should provide this to us. Many Contracts, especially in new estates, have special clauses in them about what type of house or what out-buildings can be built on the land and also provide that you must insert the same provisions in any contract when you sell the land. It may be too late once you have signed the Contract, however, we will need to look at the original Contract and advise you as to potential problems.
If you have any questions or would like to speak with a Springfield Legal Service representative regarding our service, please contact us.