Residential contracts – what’s new for sellers

Ensuring Corporate Documents' Enforceability - What to Know

17/02/2023

As the property market continues to heat up, sellers are reminded there are several new obligations when it comes to residential contracts.

Here’s a summary of what you need to know before completing the sale of your house or land:

  1. Compliant smoke alarms: You must install smoke alarms in any domestic dwelling. If you fail to do so, the buyer can claim an adjustment at settlement that’s equal to 0.15 per cent of the purchase price. On a $750,000 contract, this equates to an adjustment of $1,125! So, make sure you have working smoke alarms in the property.
  2. Pool compliance: You’re obliged to provide your buyer with a pool safety certificate. Under the contract, a pool compliance certificate means – a pool safety certificate; a building certificate that may be used instead of the Pool Safety Certificate under the Building Act 1975 (Qld); or an exemption from compliance on the grounds of impracticality under the Building Act 1975 (Qld). A failure to hand over the certificate at settlement will allow a buyer to terminate the contract.
  3. Deposit by direct debit: In a sign of the digital era, more deposits are being paid electronically. Due to the processing time for electronic payments, the day the buyer makes the payment is the day that the deposit is considered to have been paid (rather than the day the funds clear in the destination account). If the buyer doesn’t pay the deposit by the due date, you as the seller can no longer immediately terminate the contract of sale. Instead, you’re able to give notice to the buyer to complete the payment and can only terminate the contract if payment has not been made two business days after the notice was issued.
  4. Seller warranties: New contracts now stipulate that the seller does not “warrant that the present use is lawful”. So, for example, if the property is being used as a gym, that does not mean that a gym is lawfully allowed on the property. As a seller, it is important to disclose if you are unsure whether the current use of the property is lawful.
  5. Extension of settlement date: Anyone, either the buyer or seller, can extend the date of settlement at any time up to 4pm on the initial settlement date. You must then make a new date for settlement, which can’t be later than five business days from the original date. To extend the settlement date, you must give notice in writing. 

At GLG Legal, we aim to take the confusion out of buying and selling. 

Get in touch with our team today, to see how we can help you. Phone our office in Brisbane on: (07) 3161 9555 or email: info@glglegal.com.au 

 

 

 

 

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