REIQ Contract Termination in Qld
Have you signed a house and land contract to purchase in Queensland but are unsure if you can terminate the contract before settlement?
Buying a property in Queensland can often easily become a complicated legal process. Horrocks Solicitors have been helping Queenslanders settle their conveyances for over 30 years and are legal conveyancing experts in Brisbane, the Gold Coast and Greater Area.
When it comes to contract termination it is strongly advised to contact a conveyancing solicitor to help you through the legal process to avoid any significant mistakes and financial consequences.
What does the ‘Cooling Off Period’ mean when buying a house or land in Qld?
The ‘Cooling off Period’ starts at the beginning of a contract from the moment the Buyer has signed the contract until five business days after at 5.00 pm on the fifth day. This period is the time until which the Buyer may withdraw from the contract and cancel the conveyance for any relevant reason.
Valid reasons for withdrawing from the contract during the cooling off period may include:
Deeming the property as not worth the value of the property price
Pre-sale building inspections showing that the property has damages,
infestations or requires repairs that were not disclosed by the Seller or even if the Seller is unaware of such issues
Failure to organise finance with a bank to meet the conditions of the contract
The Contract includes unfair contract conditions where one party may cancel, change or avoid their obligations of the contract but not the other party
Waiving the Cooling off Period
The cooling off period can be waived only when the Buyer and the Seller agree to the waiving or shortening in writing. The Buyer will need to state in writing ‘that the ‘Cooling off Period ‘will end at 5.00 pm on the new day indicated’.
How to Cancel or Terminate an REIQ Contract in Qld
The Buyer must give to the Seller a notice in writing by 5:00 pm on the 5th business day of the cooling off period. This can be delivered in person, email or fax.
Cooling-off Period Exemptions
The following conveyances are exempt from a ‘Cooling-off Period’:
Properties sold at auction
If the contract provides a clause that the period does not apply
a sale that has taken place after an unsuccessful auction (before 5:00 pm on the second business day) if the buyer was an initial registered bidder in the auction
an 'option contract' or a sale contract formed as the result of an option contract. All options relating to land must be in writing and signed by all parties
if the Buyer is a publicly listed corporation (or their subsidiary), is the State or a statutory body, or is buying at least 3 lots at the same time (whether or not in the same contract).
Is the Buyer or the Seller entitled to the deposit after a contract is terminated?
The previous terms of contract that allowed Sellers to keep the deposit of the Buyer if settlement was not completed after the waiving of the ‘Cooling off Period’ have now been changed.
The new standard REIQ contract provides that the Sellers and Buyers may extend the date of settlement by 5 business days if they are delayed by their financier without a written approval by all parties.
If the Buyer has rightfully terminated the contract within the conditions set out in the contract then they are entitled to the deposit.
The Seller must refund the deposit to the Buyer within 14 days from the date of contract termination.
However if the Buyer terminates the deposit during the ‘Cooling off Period’ the Seller may deduct a penalty up to 0.25% of the purchase price from the deposit.
Can a Seller terminate a REIQ contract?
It is unusual for a Seller to choose to terminate a house and land contract as the procedure can be complicated and most likely expensive. To break a legally binding contract that has been signed by both the Seller and the Buyer exposes the Seller to the risk of penalties, fees and potentially being sued by the Buyer.
If you are ready to buy a new house or land in Queensland and sign your contract ensure that your interests and transaction is protected by the best legal conveyancing professionals in Brisbane.