Australians’ Obsession with the Property Market

Australians’ obsession with the property market continues unabated. Earlier this year, the Real Estate Institute of Queensland (REIQ) introduced changes to how contracts for sale are drawn up. As a buyer, here’s what’s new for you:

Compliant Smoke Alarms

Smoke alarms must be installed in any domestic dwelling. If the seller has not installed smoke alarms, you can claim an adjustment at settlement equal to 0.15 per cent of the purchase price. For instance, on a $750,000 contract, this equates to an adjustment of $1,125!

Buyers are also now allowed to enter the property to check whether smoke alarms have been installed. If you purchase a property without smoke alarms, you are obligated to install them after the purchase, as soon as possible.

Pool Compliance

The seller is obliged to provide a pool safety certificate. Under the contract, a pool compliance certificate refers to:

• A pool safety certificate.
• A building certificate that may replace the pool safety certificate under the Building Act 1975 (Qld).
• An exemption from compliance on impracticality grounds under the Building Act 1975 (Qld).

If the seller fails to provide a certificate at settlement, you have the right to terminate the contract.

Deposit by Direct Debit

Reflecting the digital era, deposits are increasingly paid electronically. Due to processing times, the day the buyer makes the payment is considered the payment date, rather than the day the funds clear in the destination account.

If the deposit is not paid by the due date, the seller cannot immediately terminate the contract. Instead, they must issue a notice for payment. Termination can only occur if the payment is not made within two business days of the notice being issued.

Seller Warranties

New contracts specify that sellers do not “warrant that the present use is lawful.” For example, if a property is being used as a gym, it does not guarantee that a gym is lawfully permitted on the property.

Buyers must carefully verify whether the intended use of the property is lawful, rather than relying on the seller's assurances.

New Termination Rights

Buyers now have the right to terminate a contract if there is:

• An error in the boundaries or area of the property.
• An encroachment by structures onto or from the property.
• Services passing through the property that do not serve it and are not protected by disclosed encumbrances.
• A mistake or omission in describing the property or the seller’s title.

Extension of Settlement Date

Either the buyer or seller can extend the settlement date at any time up to 4 pm on the original settlement date. The new settlement date cannot be more than five business days from the original date.

To extend, notice must be given in writing.

Contact GLG Legal

At GLG Legal, we aim to take the confusion out of buying and selling. To make an appointment, contact us on (07) 3161 9555 today.