Attwood Marshall Lawyers Property and Commercial Law Senior Associate Tobie Mitchell discusses cautionary cases that highlight the hidden risks of deposit deadlines, and what agents need to be aware of when working with buyers and sellers in Queensland.
As a real estate agent, you are often the first point of contact when something goes wrong in a transaction. That makes it critical to understand exactly where your authority begins and ends – and the consequences when those lines are crossed.
In the Queensland Supreme Court case of Evans v Jan [2025] QSC 31, the buyer was unable to meet his deposit deadline due to his bank’s daily transfer limit. He contacted the listing agent to explain the delay. The agent texted back “ok” and noted they would let the seller know. The buyer paid in instalments over two days, believing the arrangement had been settled.
It had not. The seller told the court she had never authorised any extension. Her solicitors terminated the contract on 29 January, and the buyer lost his $98,500 deposit.
The Supreme Court found the agent had no actual or ostensible authority to grant an extension on the seller’s behalf. Varying an essential term of the Contract was deemed to be a matter for solicitors, and not agents. However well-intentioned, the agent’s text messages had no legal effect and could not protect the buyer or keep the deal together.
What the law says
In Queensland, time is of the essence in property contracts. If a deposit or settlement funds are not paid by the agreed deadline, the seller is legally entitled to:
- terminate the contract,
- keep the deposit, and
- claim any shortfall on a resale of the property.
This is stricter than in New South Wales and Victoria, where lawyers are involved in the contract exchange from the outset.
In Queensland, agents prepare and present contracts for signing. The benefit is that deals can be made without much hassle, however it does come with the added risk for some buyers who might be over committing to binding, time-critical terms without having received any legal advice.
While there is a five-day cooling-off period after signing, terminating under those provisions costs the buyer 0.25% of the purchase price. For a $985,000 property, that is nearly $2,500. Many buyers don’t seek legal advice within that window, and by the time they do, they are already bound to an unconditional contract.
Encouraging your clients (buyers and sellers alike) to engage a property lawyer before signing is not just good advice, it protects the transaction and reduces the risk of deals falling over.
The Evans case above highlights something agents must keep front of mind: if a buyer or seller raises any issue with a deposit deadline (or any other variation of contract, such as moving the settlement date), it must be agreed by the solicitors acting for each party.
As an agent, while you can assist with informal negotiations and “smoothing over” any requests, at the end of the day, there is no authority for the acting agent to grant extensions or vary contract terms. Your discussions will not bind the seller and could even expose you to a claim from a buyer who relied on them.
The right channel is always solicitor to solicitor.
Helping buyers understand their obligations upfront
Part of your value as an agent is helping buyers come to the table prepared. Two areas where early guidance makes a real difference are finance pre-approval and contract conditions.
Finance pre-approval
A loan pre-approval means a lender has agreed in principle to lend up to a certain amount. It allows buyers to search with confidence, negotiate from a stronger position, and act quickly when the right property comes up. It also signals to sellers that an offer is serious and less likely to fall through, which can work in your favour when managing vendor expectations too.
That said, pre-approval is not a guarantee. Changes to a buyer’s personal circumstances, a negative property valuation, or shifts in lending policy can all affect whether final approval proceeds.
One of the most disruptive scenarios for any transaction is a lender pulling finance at short notice – whether due to a problem with the buyer’s credit profile, or because the lender’s valuation of the property falls short of the purchase price.
When this happens, the buyer may be in breach of contract and unable to settle. At that point, the seller has options: they can terminate and keep the deposit, pursue damages including the shortfall on any resale, or (if they are willing) negotiate an amended purchase price or extended settlement date to keep the deal alive. As the agent, you are often the first to hear that something has gone wrong, and while you can attempt to informally manage the situation, however any final decision or outcome should be directed to the solicitors.
Pointing buyers toward pre-approval early and making sure they understand it is a starting point rather than a guarantee, reduces the likelihood of that situation arising in the first place.
Contract conditions
Buyers should always ensure their contract is subject to finance and a satisfactory pest and building inspection. Remind buyers to confirm that no fixtures included in the contract have been removed prior to settlement, and that any concerns raised in a building and pest report are addressed before they go unconditional.
A deal that falls over at the inspection stage is far less damaging – for everyone, including you – than one that collapses at settlement.
When the bank causes the delay
Bank delays are one of the most frustrating causes of settlement failures, and they can affect buyers and sellers equally.
A buyer may be waiting on formal finance approval. A seller may need their bank to discharge an existing mortgage, a process that can take anywhere from one week to six weeks depending on the lender. If either party is slow to return signed documents, or if there are discrepancies in names or signatures across bank and legal documents, settlement can be pushed past the deadline through no fault of the agent or the parties themselves.
This is what happened to a Queensland couple who in 2021 paid a $75,000 deposit and were ready to settle, but their bank (Westpac) failed to attend settlement and could not hand over the balance funds in time. Westpac indicated it could settle the following morning, missing the deadline by less than 24 hours. The sellers were legally entitled to terminate and keep the deposit.
In that case, Westpac acknowledged the error and reimbursed the couple $100,000, covering the deposit, legal fees, and compensation for distress. Not every buyer dealing with a bank error will be so fortunate, and not every lender will accept responsibility so readily.
When you sense that either side is running close to a deadline, escalate early. A quick conversation between solicitors may be all it takes to agree a short extension. But that conversation needs to happen before the deadline, not after.
Attwood Marshall Lawyers – Your property law partners
We work closely with agents across Queensland to help transactions reach settlement smoothly. Whether it’s pre-contract advice for buyers, contract reviews, or navigating a dispute, our property and commercial law team is here to support you and your clients.
For conveyancing and contract advice, contact our Property and Commercial Law Department Manager Sarah Jones on 07 5506 8233, sjones@attwoodmarshall.com.au, or free call 1800 621 071.
If a transaction has broken down and a client needs dispute resolution advice, contact our Commercial Litigation Department Manager Georgia Trapp on 07 5506 8278, gtrapp@attwoodmarshall.com.au, or free call 1800 621 071.
