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Preparation is key! Best practice when preparing Contracts of Sale

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Preparing Contracts of Sale is a daily task for most real estate agents in Queensland. As an agent, it is important to understand the risks and implications of preparing Contracts in Queensland, and what you can do to ensure fewer problems arise once the conveyancing process commences. Attwood Marshall Lawyers Property Lawyer Alexandra Hughes explains best practice when preparing Contracts.

Always Order a Title Search and ID Parties

Prior to preparing the Contract it is recommended that you always order a Title Search. This is the only way to ensure that the seller is the true owner of the property, and to confirm how their name is recorded on Title. When completing the seller’s details on the Contract, you should always copy their name exactly as it is on the Title Search. All owners listed on the Title should be recorded as sellers on the Contract.

Similarly, when completing the purchaser’s details on the Contract, you should always copy their name from their Government Issued ID, to ensure there are no spelling mistakes in their name or middle names missing.

Once the Contract is signed and the conveyancing process commences, it is not easy to amend the parties to the Contract, fix spelling errors or add middle names. The process involved will usually incur additional costs for the parties and sometimes requires the original Contract to be rescinded and a new Contract to be entered. It is much easier to get these details correct from the start.

A Title search will also assist you to complete the correct property details and ensure all Title Encumbrances are listed on the Contract.

Finance Condition and Tenancies

When completing the finance condition of the Contract and the Tenancies, it is imperative that all details are filled in. If it is the case that not all sections of the finance condition are completed, the seller may argue that the Contract is not subject to finance, landing the buyer in hot water should they require approval of finance for the purchase.

The Tenancies should also be properly completed on the Contract, if applicable, to avoid the buyer arguing that the Contract is not subject to a tenancy and that vacant possession should be provided on settlement. This can cause an array of problems for a seller unable to vacate their tenant from the property and risks breach of Contract for being unable to provide vacant possession on settlement.

Pool Safety

If there is a pool on the Land, a Pool Safety Certificate, or Notice of No Pool Safety Certificate must be provided to the buyer, prior to signing of the Contract. If there is no Pool Safety Certificate at the time of entering the Contract, however the seller intends on providing one before settlement, we recommend a special condition be written into the Contract.

Should there be no Pool Safety Certificate for the pool on the property at settlement, it will be the buyer’s responsibility to obtain a Pool Safety Certificate within 90 days of settlement. Some buyers may have to incur substantial costs to obtain a Certificate if the pool and property do not comply with the Pool Safety requirements.

Safety Switch, Smoke Alarm and Neighborhood Disputes Warranties

An approved safety switch and compliant smoke alarms are required to be installed in a residence when selling in Queensland. When an agent is appointed to sell a property, you should check with the seller at the commencement whether they have an approved safety switch and compliant smoke alarms installed. If they do not, they should arrange for installation immediately and prior to entering a Contract.

Any applications or orders in relation to neighborhood disputes are also required to be disclosed on the Contract, and copies of any relevant documents provided to the buyer, prior to signing the Contract.

Not only is it an offence for a seller to give false or misleading information in relation to the safety switch, smoke alarm and neighborhood disputes warranties in the Contract, but the real estate agent can also find themselves in trouble. It is important that you obtain clear instructions from the seller in relation to these warranties, preferably in writing, and that you do not complete the questions of the Contract based on your assumptions or vague instructions from the seller.

Consequences apply for agents under the Property Occupations Act (Qld) 2014 and the Australian Consumer Law for those who make false or misleading representations that would be reasonably lead to a belief in the existence of a situation that does not in fact exist.  

Special Conditions

In Queensland, real estate agents are unable to engage in legal practice unless they are an Australian Legal Practitioner. If a seller or buyer requires special conditions to be written into a Contract, then this should always be drafted by a suitably qualified Legal Practitioner and the parties should obtain legal advice on the affects and suitability of the special conditions to their situation.

Agents should be wary and avoid engaging in discussions in which the seller or buyer may believe that the agent is trained or qualified to provide advice in relation to the law, legal documents, and Contracts. Examples would include, discussing the suitability of or suggesting special conditions to be included on the Contract, explaining the effects of the Contract on either party, and writing or editing special conditions to include on a Contract.

If in doubt, the parties should always be referred to their lawyer for advice, discussions regarding the Contract and writing of special conditions.

When dealing with sales of units or duplexes in Queensland, agents should ensure they complete the Contract for Lots in a Community Titles Scheme and attach a Disclosure Statement signed by the seller, prior to presenting the Contract to the buyer. Parties may have termination rights if the Contract is not prepared on the correct form, or a properly completed and signed Disclosure Statement is not attached to the Contract.

Why is it important to engage a suitably qualified property lawyer when buying property?

It would be wise for a person to be appropriately advised before signing any contract or entering a legally binding contract. If not, this may result in unanticipated and unnecessary difficulties and financial cost. Buying property is one of the most significant financial investments you can ever make. It is important for home buyers to protect their best interests from the start.

A property lawyer can assist by:

  • Communicating with the Solicitors or Conveyancers acting for the Seller
  • Evaluating the contract and any special conditions, either before or after signing, and advise the buyer on important terms
  • Ensuring critical dates are met for things like finance approval, building and pest inspections and settlement
  • Communicating with the banks and ensuring they are ready for settlement
  • Instructing on transfer duty obligations and organising payment before settlement
  • Ensuring all transfer documentation is prepared correctly and lodged with the relevant parties
  • Preparing settlement figures and cheque details, liaising with the banks and the Solicitors for the Seller
  • Ensuring that the settlement goes through without any issues
  • Attending the settlement
  • Advising Council of the change of ownership of the property

Attwood Marshall Lawyers – ensuring best practice when drafting contracts in Queensland

Attwood Marshall Lawyers offers FREE pre-signing Contract advice to buyers and sellers in Queensland. Contract terms and conditions can be explained to the buyer or seller prior to signing, and we can further provide advice on any need to draft special conditions. It is often too late to make changes to a Contract or for one party to change their mind once both parties have signed.

For property and conveyancing advice, contact our team any time by calling Property and Commercial Department Manager, Jess Kimpton, on direct line 07 5506 8214, email jkimpton@attwoodmarshall.com.au, mobile 0432 857 300.

Our Property and Commercial Lawyers are available at our Coolangatta, Kingscliff, Robina Town Centre, Brisbane, Sydney and Melbourne offices. Need assistance outside regular business hours? Our Robina Town Centre office is also open Thursday nights until 9pm and Saturday mornings until 12noon.

Book an appointment with the team instantly online now.

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Alexandra Hughes Property and Commercial Lawyer

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