On 20 January 2022, the Real Estate Institute of Queensland (REIQ) released new versions of the Contract for Houses and Residential Land (17th edition) and the Contract for Residential Lots in a Community Titles Scheme (13th edition).

The latest editions contain many amendments, but Enterprise Legal considers the following six changes to be the most significant:

Pool Safety

Both Contracts now allow for a Seller to provide a No Pool Compliance Certificate to the Buyer prior to the Contract being signed and in doing so, there is no other requirement from the Seller in relation to the pool on the land. The Buyer will no longer have a termination right if the pool is not compliant at Settlement.

If however, the Seller does not disclose that there is not a Pool Compliance Certificate, prior to entering into the Contract, then the Seller will be required to obtain one prior to Settlement, at the Seller’s cost. If they fail to do so, the Buyer will have a right to terminate.

Smoke Alarms

From 1 January 2022, dwellings and residential units offered for sale must have smoke alarms installed that comply with the current requirements – these requirements have been getting ‘phased in’ for a number of years now. The new versions of the Contracts specify that should a Seller fail to comply with these requirements prior to Settlement, the Buyer will be entitled to a deduction at Settlement equal to 0.15% of the Purchase Price. Sellers and real estate agents should be aware of this and consider whether it is more appropriate to include a Special Condition fixing this deduction at an amount that has bearing on the actual cost of making the residence compliant. 

New Seller Warranty

The new contract editions require Sellers to warrant, as at the Contract Date, they have not received any communication from an authority that may lead to the issue of a show cause notice, enforcement notice or notice to do work. This requirement is a lot broader than previous, which only required a Seller to make a disclosure if an actual notice had been issued. In reality, authorities such as Councils and service providers usually correspond with owners prior to issuing formal notices and this new requirement put the onus on Sellers to disclose any such correspondence. 

New Termination Rights

Buyers now have a termination right is there is infrastructure that is unrelated to the delivery of services to the property that passes through the property and such service is not protected by a registered easement, BMS or statutory authority.

Buyers will also have a termination right if any service to the property passes through another property and such service is not protected by a registered easement, BMS or statutory authority.

This means that it is very important for Sellers to complete a ‘Dial Before You Dig’ or similar search prior to entering into the Contract, so that they are aware of the location of all services which may need to be disclosed. 

Settlement Extensions

This new concept allows either party to unilaterally extend Settlement by up to 5 Business Days after the Scheduled Settlement Date specified in the Contract.

This mechanism only applies to Settlement and does not apply to other conditions like the Finance or Building and Pest Condition. 

Default Place for Settlement

The standard condition has been amended so that is a Seller does not advise the specific location for Settlement (e.g the specific law firm) at least 2 Business Days before the Settlement Date, Settlement will be required to take place at the Titles Office closest to where the land is located. Again, given the erroneous results this condition could result in, we recommend including a Special Condition to amend it.

Summary

There has been some significant changes made in the latest REIQ Contract updates for residential dwellings and units and it is important that parties understand what these mean and include appropriate Special Conditions to amend the Special Condition if required. 

Firm Director, Peta Gray and Lead Conveyancer, Adrianna Williamson recently presented a Webinar regarding these changes and recommendations for dealing with those changes. 

If you would like to receive a copy of the Webinar recording, or have any further questions about the changes and what that could mean for you, please contact our conveyancing team

☎️ | (07) 4646 2621
✉️ | 

Our team has also made a range of Special Conditions, including the ones referred to in this article, available for your use via the links below:

REIQ Contract for Houses & Residential Land (17th edition)

REIQ Contract for Residential Lots in a Community Titles Scheme (13th edition)

One of the first questions we ask our clients that are purchasing a property is: “Will you be moving into the property after settlement?”

The answer is normally either “yes, I can’t wait to move in” or “no, I am not moving in as this is an investment property”.

But sometimes there is a third scenario- where our client has found their dream house that they want to move into as soon as possible but there is a tenant in the property.

Whilst this situation is less than ideal, there are still a couple of options available for you to consider. Part of our service includes reviewing the draft contract prior to signing. This is particularly important when a tenant is involved as we can check that the critical dates ‘line up’ in relation to both applicable notice periods, and the transfer (stamp) concession eligibility requirements – read on to find out more.

Getting the Tenant to Leave

It’s important to know what type of Tenancy Agreement is in place, as this determines the notice period that must be given to the tenant to require them to vacate.

For a periodic agreement the tenant has four weeks to vacate when a sale contract is in place for the property.

However, if there is a fixed term agreement in place the tenant has the later of 2 months from the day of notice, or the date on which the fixed term agreement ends to vacate the property.

Notice is not normally given until the contract goes unconditional (as understandably, the Seller won’t want to kick their tenant out unless they know that the property is definitely being sold), so it is important to allow sufficient time between the notice being given and settlement.

Of course, the tenant can agree to leave early at their own discretion but with no guarantee of this, it’s important to understand the relevant notice periods at the time of entering into a contract.

Transfer (Stamp) Duty Concession Requirements

Transfer Duty (often referred to as ‘stamp duty’) is a government tax charged on most property transactions, with the amount payable dependant on the purchase price and whether or not the purchaser can claim a concession or exemption.

As an owner/occupier intending to move into the property, you may be entitled to claim either the First Home Concession if you have never owned a property before or the Home Concession if you have previously owned property before. These concessions mean that you save a significant amount on the ‘full rate’ of transfer duty, which is otherwise payable (including if you are purchasing the property as an investment).

A key eligibility requirement to receive either concession, is that any tenants occupying the property under an existing tenancy agreement must move out when their lease expires or within 6 months of settlement at the latest, whichever is the earlier. This also applies to previous owners who may be living in the property for a period after settlement.

If you claim a concession and the tenancy doesn’t end within the required timeframe you will then need to notify the Commissioner of State Revenue by completing a Notice of Reassessment and pay the higher stamp duty amount. Therefore, it is very important to understand the eligibility requirements and ensure that you can comply with them.

Taking Possession

Once the tenant has vacated you will likely want to inspect the property to ensure no damage has been caused and that it has been appropriately cleaned and the tenant has otherwise complied with their end-of-lease obligations.

Any issues that come up at the inspection should be discussed with the selling agent and managing agent (if applicable) so that it can be dealt with by them and the tenant’s bond utilised if possible.

In the event that this is not possible, we can provide advice on any other options you may have before settlement.

Enterprise Legal’s Top Tips

1. Talk to the selling agent when putting in your offer to find out about the terms of the tenancy and if the tenant has any intentions of vacating earlier than required;
2. Have the contract reviewed by us prior to signing and discuss any concerns you have about the tenancy with us at the same time; and
3. Understand that if you claim a stamp duty concession and subsequently do not meet all of the requirements, you have an obligation to notify the Queensland Revenue Office and you can be subject to penalties for giving false and misleading declaration if you do not give that notice.

Are you in the process of purchasing a property? Contact Enterprise Legal's experienced conveyancing team now for more expert advice:

☎️ | (07) 4646 2621
✉️ | 
🌐 | Property Conveyancing Services