Incoming Changes to QLD Residential Contracts
A new residential contract will be issued for use from 20th January 2022. Please see Nick’s summary of these changes below.
Extension of Settlement Date
Please follow this link to our previous article on this subject.
Smoke Alarms
New smoke alarm requirements were introduced on 1st January 2022. Please see our recent blog for a summary of these changes.
In accordance with these changes, the contract has been updated to impose obligations on sellers to install compliant smoke alarms in any dwelling prior to settlement. If compliant alarms are not installed by the settlement date the buyer will be entitled to a reduction of the purchase price in the amount of 0.15% of the purchase price. This is the only right a buyer will have against a seller in relation to complaint smoke alarms and this right must be claimed prior to settlement.
There has also been a change to allow for an inspection of the smoke alarms under the terms of the contract.
Grace Period for Deposit by Direct Debit
Under the clause, the buyer will be deemed to have paid the deposit on the day that the buyer instructs their financial institution to make the payment. This means that if a payment does not clear in the deposit holder’s account on the due date but was paid by the due date by the buyer’s financial institution it will be deemed to have been paid on time.
To take advantage of this deeming provision the buyer will be required to provide evidence of the payment to the deposit holder and must not take any action to delay the payment.
If the money is not received by the due date in the contract, the seller may give notice to the buyer requiring payment within 2 business days. If the payment is not received within the 2 business days stated in the notice, the buyer will be in breach and the seller may terminate the contract.
Seller Warranties
The warranties have been re-organised into two categories, as per below:
(a) warranties accurate on the contract date; and
(b) warranties accurate on the settlement date.
The most significant change is that a seller now warrants that at the contract date they have not received any communication from an authority that may lead to a show cause, enforcement notice or notice for works to be completed being issued. This means that it isn’t just the notice being issued on the property but the communications with the authority that most likely would occur prior to the notice issuing which could give grounds for a buyer to terminate the contract.
Services
Under the new clause, a buyer may terminate the contract if service infrastructure that does not relate to gas, electricity, water and sewerage pass through the land and is not protected by a registered easement or statutory authority and these services have not been disclosed to the buyer prior to contract.
A seller should undertake a dial before you dig search to confirm all easements prior to a buyer being presented with a contract.
Notices to do Work
The requirements for a seller to comply with notices issued before the contract date remain. However, if a seller discloses the notice to the buyer in writing or in the contract, the requirement to comply with the works notice is removed.
Contract Date
The definition of contract date has been amended to include a scenario when there is no contract date. The date will be the date the last party signed the contract.
If you have any questions about these changes feel free to give our team a call on (07) 33108716.
