BUYING A PROPERTY
In Queensland, if you enter a standard contract of sale for the purchase of a house, a unit or vacant land (‘Contract of Sale’), which in respect of houses and land, the ‘REIQ Contract for Houses and Residential Land (14th Ed)’ is most commonly used, and in respect of units, the ‘REIQ Contract for Residential Lots in a Community Titles Scheme (10th Ed)’ is currently most popular, according to clause 8.1 of the ‘Terms of Contract’ (which are the standard terms and conditions of the Contract of Sale, usually found towards the back of the document) the property is at the Buyer’s risk from 5:00pm on the first Business Day after the Contract Date.
This is an important factor to be mindful of when purchasing a Property because the Buyer is unlikely to take possession of the Property until Settlement Date (which may not take place 2-4 weeks, if not more, after the Contract Date). During this period, the Buyer has to carry the risk of any damage being suffered by the Property, despite the fact that the Seller must use the Property reasonably until Settlement Date.
The Contract Date and Settlement Date are recorded in the Reference Schedule of the Contract of Sale, save that the Settlement Date may be varied by the consent of parties if necessary. Generally, it is wise to make enquiries about the cost and availability of insurance cover for the Property, contents and public liability (or any other insurance cover that your insurance broker or home insurance company may advise) prior to entering the Contract of Sale, as insurance cover can be expensive.
If you do not arrange for appropriate insurance cover at the right time, and the Property is damaged between the Contract Date and Settlement, you may have to wear the cost any damage and still settle in accordance with the Contract of Sale.
This commentary is of a general nature only, containing nothing more than some general information for the reader. It is not intended to be legal advice, nor cannot it be relied upon as legal advice. To this end, please read our Website Terms including the disclaimer contained therein carefully. Laws, rules and principles may be subject to sudden and unexpected changes and you should always consult a lawyer about your specific circumstances.