This blog is based on a radio broadcast on Logan 101FM on 27 March 2023.
Buying or selling residential property in Queensland involves strict deadlines, complex contracts, and various searches. Below, our legal team answers five frequently asked conveyancing questions to help you navigate your next transaction smoothly.
In This Article:
What Are Off-The-Plan Contracts?
Looking to build your first home or purchase in a new development? You will likely encounter an off-the-plan contract.
"Off-the-plan" refers to purchasing a property where the individual lot has not yet been formally created or registered with the Queensland Titles Office. While these properties are often priced lower than established homes, they come with distinct benefits and risks.
The Benefits
Government Grants: Access incentives such as the Queensland First Home Owner Grant to help cover construction costs.
Property Customisation: The opportunity to select internal fixtures, fittings, finishes, and layout adjustments before construction. (Note: Larger developments may have strict architectural design guidelines regarding exterior colours and materials).
Capital Growth Potential: Value may grow between the date you sign the contract and the date construction finishes.
The Risks & Considerations
Uncertainty of Final Product: You are buying based on plans and specifications. Minor design alterations or changes in finish quality can occur during construction.
Extended Delays & Sunset Clauses: Construction delays are common. Contracts can run for years and include complex sunset clauses that outline when either party can terminate if the build exceeds its deadline.
Market & Valuation Fluctuations: Property market shifts may cause the final valuation at completion to come in lower than your agreed purchase price.
Lending Hurdles: Banks are often cautious with long-term off-the-plan approvals due to the time gap between signing and settlement.
Legal Tip: Because you are contracting on assumptions about future market conditions and developer delivery, always have a solicitor review sunset clauses and developer special conditions before signing.
Why Isn't a 7-Day Settlement Practical in QLD?
When you find a buyer, it is natural to want to settle as quickly as possible. However, requesting or agreeing to a 7-day settlement period in Queensland creates extreme contract risk for both parties.
A standard Queensland property transaction requires multiple administrative and legal processes that cannot be rushed:
Transaction Step | Standard Timeframe | Why It Cannot Be Bypassed |
Finance Processing | 14-21 Days | Lenders need time to value the property, process the loan, and issue documents before granting unconditional approval. |
Council & Title Searches | 10-14 Days | Local Council searches (rates, water meter reads, land usage) take time to process. These searches are essential to calculate accurate financial adjustments at settlement so you don't pay the other party's debt. |
Property Inspections | 7-14 Days | Arranging building, pest or body corporate record inspections requires scheduling flexibility between inspectors and tenants/occupiers. |
Bank Settlement Prep | 3-5 Days | Incoming and outgoing mortgagees need time to prepare mortgage releases and process electronic funds transfers via platforms like PEXA. |
Recommended Timeframe: We generally recommend a settlement period of 21-30 days from the Contract Date. This provides a realistic window for all mandatory searches, finance approvals, and bank coordination without putting your deposit at risk.
What Should You Know About Finance Approval?
Finance delays are a leading cause of contract stress. To ensure your loan approval process proceeds smoothly under a standard REIQ contract finance clause, keep these core principles in mind:
Know Your Borrowing Capacity First: Establish clear spending boundaries with a broker or lender before making formal offers.
Secure Pre-Approval: Formal pre-approval gives you negotiating confidence and shows real estate agents genuine buying intent.
Submit Complete & Accurate Data: Provide up-to-date details on income, assets, debts, and living expenses to avoid processing delays when formal approval is triggered.
Budget for Total Outlays: Remember that purchase price is only part of the equation. Factor in Queensland transfer duty (stamp duty), legal fees, search costs, and loan establishment charges.
Respond promptly to Lender Requests: Any delay in providing requested bank statements or tax documents will push back your finance approval deadline.
Have Loan Terms Reviewed: Loan agreements are complex legal instruments. Have your solicitor review the terms and covenants before execution so you fully understand your obligations.
Get A Free Conveyancing Quote
Before you sign on the dotted line, let our experienced Queensland conveyancing team review your contract terms and provide an upfront quote.
Do You Have to Reduce Your Price After a Failed Building & Pest Inspection?
If a buyer requests a price reduction after issues are identified in their Building and Pest (B&P) inspection report, you have no legal obligation to lower the purchase price.
However, as a seller, you must weigh the report's commercial realities before responding. If the contract terminates, future buyers may uncover the exact same issues.
Your Options as a Seller
Option A: Accept the Reduction Request
Keeps the contract moving forward without the holding costs or marketing expenses of re-listing the property.
Option B: Propose a Counteroffer
Offer a smaller price reduction or agree to have specific defects rectified by qualified tradespeople before settlement.
Option C: Reject the Request
Refuse any adjustment. The buyer must then decide whether to proceed at the original price or exercise their right to terminate the contract under the B&P clause.
Key Takeaway: Always weigh the severity of the identified defect against the cost, time, and uncertainty of relisting the property.
How Do Simultaneous (Contemporaneous) Settlements Work?
If you need to sell your current residence in order to fund the purchase of your next home, managing settlement timing is critical to avoid being left homeless or in breach of contract.
This scenario requires a contemporaneous (simultaneous) settlement.
How It Works
Linked Contracts:
Custom Special Conditions are drafted into one or both contracts, making settlement of your purchase strictly subject to the successful settlement of your sale.
Simultaneous Fund Settlement:
On settlement day, the sale proceeds from your current home are directed immediately through the electronic settlement network (PEXA) to complete the purchase of your new property at the exact same time.
Crucial Safeguards
Both contracts must have aligned settlement dates and compatible conditions.
Coordinate banking requirements weeks in advance to ensure both outgoing and incoming lenders are ready on the same day.
Tailored special conditions are essential. Without them, you risk being legally obligated to settle your purchase before you receive funds from your sale.
Ready to Move Forward With Your Queensland Property Contract?
Whether you're reviewing an off-the-plan contract, setting up a simultaneous settlement, or negotiating building and pest terms, having experienced legal representation ensures your deposit and interests are fully protected.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current, and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication are those of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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