New REIQ residential contracts due 20 January

New editions of the Contract for Houses and Residential Land (17th ed.) and Contract for Residential Lots in a Community Title Scheme (13th ed.) are to be released on 20 January 2022.

Read about the most significant changes in the contracts, which are being prepared by Queensland Law Society and the Real Estate Institute of Queensland.*

Although the contracts will not be available and should not be used before 20 January, QLS believes that the following information will be helpful, given the upcoming end of year holiday period.

Lexon will be making updates to a number of parts of the relevant Conveyancing Protocol packs. The updated packs will be released prior to the new contracts becoming available for use and will only be for use with contracts formed using the new contract editions. It will be critical for the profession to carefully check edition numbers of contracts formed around that period and to use the updated Conveyancing Protocol documents for matters involved with those contracts. Practitioners will need to adapt the tools (changes will be tracked) if working on an older edition contract after the new contract editions are released. 

The changes include:

  • The ability of either party to obtain a short extension to settlement if the party is unable to settle due to the inaction or delay of a financier or for any other reason. The new clause 6.2 responds to ongoing difficulties faced by our members and their clients who have been unable to settle on time, leading in some cases to contracts being terminated. QLS and REIQ appreciate our respective members raising these significant concerns and therefore have updated the provisions relating to “time of the essence” to alleviate the circumstance where buyers are potentially unfairly affected by delays outside of their control.
  • New smoke alarm clause 7.8 responds to changes to smoke alarm regulations on 1 January 2022. The current editions can continue to be used up to 20 January 2022, but the new clause will impose a contractual obligation on the seller to install smoke alarms in compliance with the new requirements.
  • Express provision for paying a deposit by direct debit and a grace period allowed to address the impact of delays in the deposit of money to accounts when using direct debit. 
  • Amendments to the Pool Compliance Certificate obligations. A seller is required to hand over a Pool Compliance Certificate for a non-shared pool on the land at settlement. The only exception to this obligation is if a Notice of No Pool Safety Certificate is given to the buyer prior to contract.
  • Updates to the seller warranties are in clause 7.4. The warranties have been reordered. A new warranty has also been added. The seller warrants that they have not received communication from a competent authority that may lead to the issue of a show cause or enforcement notice or a notice to do work referred to under clause 7.6. The reason for adding the new warranty is that, in practice, local governments correspond with owners for a considerable period without issuing a formal non-compliance notice. On becoming aware of the proposed sale of a property (usually when a buyer does a search) council may issue a formal notice, which under the present clause 7.6 is the buyer’s responsibility. This seems an unfair result and the new clause is intended to overcome this issue. 
  • There are amendments to clause 7.5 regarding services infrastructure located on the Land but unrelated to services provided to the Land. This includes a new right to terminate if infrastructure unrelated to delivery of services (gas, electricity, water, sewerage) to the Land pass through the Land and are not protected by a registered easement, BMS or statutory authority that has been disclosed to the buyer.
  • Amendments to clause 7.6 to change the responsibility for notices to do work, depending on when the notice is issued (prior to or after contract), when compliance with the notice is required (before or after settlement) and whether the notice is disclosed by the seller to the buyer prior to contract. 
  • The definition of Contract Date has been amended to accommodate signing of electronic contracts in Realworks.

*NOTE: The summary of significant changes was updated on 24 December 2021 following changes to the new clause 2.2.

Share this article

Leave a Reply

Your email address will not be published. Required fields are marked *

Search by keyword