In our last blog we shared how having your Contract reviewed can reduce your stress when purchasing a property. We strongly recommended that you have your lawyer or conveyancer undertake a Contract review so that all conditions are completed and you fully understand what you are signing. In this blog, we cover what happens once the Contract is signed and on its way to your lawyer or conveyancer, and what you need to do in the interim.
When buying (or selling) property in Queensland, the transaction is governed by the Property Law Act 1974 (PLA). This can be complex legislation and one that needs to be closely adhered to in order to protect your interests. Most contracts will refer to this Act in the “standard conditions” attached to the Contract. Quite often, buyers (and sellers) will not read or familiarise themselves with these standard conditions and therefore risk overlooking important terms.
Two important terms worth highlighting are ‘property insurance’ and ‘time is of the essence’.
Did you know that you, as the buyer, are responsible for insurance over the property from 5pm on the first business day following the Contract date? You haven’t had the property inspected, let alone purchased or even moved into the property yet… you may even be waiting on finance approval, however Clause 8.1 in the REIQ current Contract states “The property is at the buyer’s risk from 5pm on the first business day after the Contract date”. Whilst it doesn’t state “you need to take out insurance” it does state “risk”, which is one of the same. So, we say it’s a good idea to check with your selling agent as some of them offer complimentary cover over your property up to 90 days. Otherwise, bytherules has a good relationship with a reputable insurer that we can recommend.
The Contract’s “time is of the essence” clause can have an impact on any buyer not acting within a time limit noted in the Contract. Unlike the buyer, a seller does not have the luxury of any cooling off period or other conditions. The seller is only able to terminate in the event of the buyer’s default in meeting the contract settlement conditions. This usually only happens in a fierce market where there is competition for the property, or if the seller has had a change of heart in selling. For example, if the buyer does not advise the seller that finance is approved (or not) by the finance date, or does not pay the initial or balance deposit on the due date, the seller could terminate the contract. Needless to say, we recommend you keep good track of all the contract dates and what is required by when.
Part 3 of Buying a Property covers what to expect once your lawyer or conveyancer has received a copy of the Contract, what information they need and what next.