It is effectively an industry practice in Queensland that real estate agents prepare a contract when a property is sold, either by way of private treaty, or auction.
Although auction contracts are a different beast given the bare bones approach and lack of drafting that is usually required (given that they are essentially unconditional from the fall of the hammer), contracts formed by negotiation can, and have, posed a problem for buyers and sellers (including their legal representatives).
As a result of time constraints, a contract can be entered into without due consideration given to the necessary drafting that should be included in the contract.
The standard form REIQ Contracts have, for a number of years, been an industry standard for most land sales in Queensland. However, the form of the Contract has changed significantly over those years and, in particular, the past few years given the significant legislative changes that have occurred in relation to various tax regimes and also the implementation of the E-Conveyancing PEXA platform.
That REIQ Contract is a fairly even-handed contract. However, if circumstances require the parties to step outside the realm of the matters contemplated by the REIQ Contracts, then poor drafting may lead the one, or both of the parties, being at a considerable disadvantage, or at risk of serious economic loss.
Outside of the finance and pest and building condition under the REIQ Contract, there are very limited rights of termination. These rights of termination will only arise in very specific circumstances. For example, if there is a material error, or misdescription, in relation to the title to the subject property.
As part of the conveyancing process, we recommend to all Buyers that an appropriately worded due diligence condition be included in the Contract. Obtaining searches is a usual part of the conveyancing process. However, going to the cost and expense of obtaining those searches is a little benefit, if the Buyer is not able to terminate the Contract due to adverse search results.
Accordingly, before entering into any contract a Buyer should speak with a lawyer to discuss any concerns, or issues in relation to the property, so that risk may be avoided by incorporating into the Contract an appropriate and tailored due diligence strategy.
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