The REIQ Contract of Sale used to buy real estate in Queensland incorporates the following:-
1. ‘Reference Schedule’ comprising the first two pages where relevant details of the sale are recorded;
2. ‘Terms of Contract’ which are the remaining pages of printed clauses which are incorporated into the contract.
Even though this contract was approved by the REIQ and the Queensland Law Society, it is important that you are aware of the following points when selling.
All contracts for the purchase of residential land in Queensland (excluding those signed at auction) have a built-in five business day cooling-off period which commences on the first business day the Buyer receives the contract signed by all Sellers and Buyers. If the Buyer uses this cooling-off protection, the Seller is entitled to retain from any deposit paid .25% of the price as compensation.
Upon signing the contract, risk of the property passes to the Buyer at 5 p.m. one business day after the contract date. You would be wise to keep up insurance on the property from the date of the contract until settlement in case the property was damaged or destroyed and it was later discovered the Buyer did not take out insurance after the Contract was signed.
‘Time of the essence’
Once each party receives a signed copy of the contract and the cooling-off period has expired, each party is bound by any time limits contained in the contract e.g. finance approval, Settlement Date. Failure by one party to strictly observe these time limits may result in the other party being able to terminate and sue for damages !!
Inclusions and Exclusions
The law makes a distinction between fixtures and chattels, with the sale price usually including fixtures but not chattels. Fixtures are structures secured either to the land itself (e.g. sheds bolted into concrete slabs, constructed BBQ’s, statutes or stone garden seats) or secured to buildings secured to the land (e.g. built-in dishwashers, alarms and vacumaids). Chattels, therefore, are generally movable items.
To avoid any uncertainty, the Contract Reference Schedule provides a section called ‘Excluded Fixtures / Included Chattels’ where the parties can specify those items which are included in or excluded from the sale price. ‘Excluded Fixtures’ can be removed by the Seller at settlement and ‘Included Chattels’ remain with the Buyer.
The Contract provides the Seller will give the Buyer vacant possession at the time of settlement. As most settlements take place from 2.00 p.m. onwards, you must have completely vacated the property by the agreed time of settlement.
Should there exist a mortgage on your title deed at the time the contract was signed, you should immediately advise your bank your property has been sold and request they prepare necessary ‘Mortgage/Security Release’ papers and a loan payout figure calculated to the settlement date.