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12 JULY 2010 – NEW VERSION OF CONTRACTS

12 JULY 2010 – NEW VERSION OF CONTRACTS

ALERT – The REIQ & Queensland Law Society have released new Contracts.

Effective from 1 July 2010, is a new House & Land Contract Version 7 and a new Contract for Residential Lots in a Community Titles Scheme Version 3. It is recommended that the correct and current version of the Contracts are used from 1 July 2010.

The most significant changes to the Contract for Houses and Residential Land are:

  • Place of Settlement – If Brisbane is inserted here, this is a reference to Brisbane CBD. In cases where the parties intend settlement to be outside the Brisbane CBD, this should be expressly identified in the Reference Schedule.
  • Clause 1– Some definitions have been added or amended. “Bond” means a bond under the Residential Tenancies and Rooming Accommodation Act 2008. “Court” includes and tribunal established under statute. The new definition of “Essential Term” was amended from previous versions to allow for the termination by either the Buyer or Seller for a breach of an essential term. Essential Term includes, in the case of breach by:
    • The Buyer: Clauses 2.2, 2.5(1), 5.1 and 6.1; and
    • The Seller: Clauses 5.1, 5.3(1)(a)-(c), 5.3(1) (d)(i), (ii) and (iii), 5.5 and 6.1

    but nothing in this definition precludes a Court from finding other terms to be essential.

  • Clause 3 – Finance – In the notice from the Buyer to the Seller regarding lack of finance approval the Buyer must also notify the Seller that it terminates the Contract.
  • Clause 4 – Building and Pest Inspection Reports – In the past, a Building and Pest Inspection Clause was considered satisfactorily met if no advice to the contrary was received by 5pm on the inspection due date. However, this self satisfying effect of the previous building and pest inspection report has been removed and now sets out the process a Buyer must follow in regards to the results of a building or pest inspection report.
    A Buyer must notify by 5pm on the Inspection Date if a satisfactory Inspector’s report has not been obtained or that this Clause has either been satisfied or waived by the Buyer. The Seller has the right to terminate the Contract by notice to the Buyer if the Buyer has not given notice by 5pm on the inspection date.
  • Clause 9 – Parties’ Default – the earlier version of the REIQ Contracts made specific provision for a seller’s rights in the event of a default by the Buyer. However, there were no reciprocal rights expressed in the Contract covering the Buyers rights against the Seller. The amendments to Clause 9 now provide the rights for both the Seller and Buyer to take action in the event of default by either party. In effect, these amendments balance up the rights of the Seller and Buyer by expressly providing contractual terms in the event of default.
  • Clause 10.8 – Severance – This new Clause allows for an offending term to be severed from the contract but allow the continued operation of the rest of the Contract.

To ensure consistency, the Contracts for Lots in a Community Title Scheme (Third Edition) has incorporated similar amendments to those referred to above.

We have attached a copy of the new 7th Edition House and Land Contract & 3rd Edition Contract for Residential Lots in a Community Title Scheme.

Please feel free to contact us should you have any queries regarding the changes.