Queensland Property Contracts – Lockdown Makes No Difference

Picture this: it’s Saturday evening. You are waiting nervously next to your phone with a glass of wine to take the edge off; waiting anxiously, after seeing your dream home at an inspection that morning. Why so serious? You have submitted an intention to make an offer to the Seller and the next call you want is from the agent with your offer, on contract, ready to sign. But before you embark on the road towards the Australian dream, whether for the first time or the fifteenth, it is important to check the wording.  I aim to unpack three of the big clauses that will feature in the favoured contract used by Queensland Agents – The REIQ contract of Sale.

As a golden rule, I’ll start with the Finance Clause or, known in the legal world, as “Clause 3”. This is a heavy hitter. It can help all your dreams come true or could potentially be the subject of your worst nightmare. So what are the basics? In a nutshell, your contract will be subject to finance when all three components of the “finance” section in the contract reference schedule are completed. This is critical. I have seen the disastrous effects of an incomplete finance clause and you do not want to be on the pointy end of that knife. So that seems easy enough. Three blank spaces, three simply entries, right? Wrong! As a buyer (or agent for the buyer) completing this clause, you want to keep the clause general to ensure you don’t unintentionally hitch your wagon to the wrong horse. In the recent case of Hauff & Anor v Miller[1] the contract specified ING as the financier (instead of the more popular entry of financier of “buyer’s choice”). The buyers instead, applied to Rock Building Society, on the presumption that this application would be more successful. When the finance approval had not been received within the time frame stipulated in the contract, the buyers commenced steps to terminate the contract. Without getting into the finer details, the key takeaway was that as the Buyers had not applied to ING as noted on the contract, the court considered that all reasonable steps were not taken, and therefore their termination was not lawful.

This leads us to the next point. Clause 3.1 provides that the contract is conditional on the buyer obtaining approval for finance on terms satisfactory to the buyer providing the Buyer takes all reasonable steps. The Finance clause has often been seen as an easy way to exit the Contract. Often, this is not legitimately used, to the success of the Buyer to terminate a contract. However, the test is two-fold as the cases establish. There must be a reasonable attempt. Firstly, use generic terminology in the reference schedule. We suggest for the amount “sufficient to complete” and  “buyers choice” for financier. Although your banker or finance broker says to allow two weeks for finance approval, this will more likely mean 3 weeks. My advice is to err on the side of caution and add the extra time. You can always satisfy your condition early if you need to. Do not delay in your application. Whilst you may not necessarily need to show you were “declined” for finance, you must show that you have acted reasonably (and in other contracts such as the ADL, you may need to show an actual decline letter). The subject to finance clause is wonderful, albeit essential if you do not have the funds required to complete the purchase. But as with most things in law, there is an ongoing requirement to act in good faith and always check the terms you have agreed to. Be sure and contact us before you sign the contract even though you like the virtual inspection. If you need any assistance regarding REIQ contracts, feel free to email me at Katherine.blood@perspectivelaw.com or call direct on 07 3317 4306.

[1] Hauff & Anor v Miller [2013] QCA 48

The Voluntary Assisted Dying Bill 2021 passed by Queensland Parliament

Finally the Voluntary Assisted Dying Act (VAD) has come into force in Queensland after much debate and news coverage. But when does it start and what does it allow?

The commencement date for the legislation is important because it excuses medical practitioners from liability or criminal offence if they follow the procedures set out in the Act and regulations. The Act does not commence until January 2023 so there is a lot of time to see how this will work.

The principles that underpin this Act:

  • Human life is of fundamental importance;
  • Every person has inherent dignity and should be treated equally and with compassion and respect;
  • A person’s autonomy, including autonomy in relation to end of life choices, should be respected;
  • Every person approaching the end of life should be provided with high quality care and treatment, including palliative care, to minimise the person’s suffering and maximise the person’s quality of life;
  • Access to voluntary assisted dying and other end of life choices should be available regardless of where a person lives in Queensland;
  • A person should be supported in making informed decisions about end of life choices;
  • A person who is vulnerable should be protected from coercion and exploitation; and
  • A person’s freedom of thought, conscience, religion and belief and enjoyment of their culture should be respected.

It is important to note that the Powers of Attorney Act is not an Act that applies to the VAD Act, which means an attorney cannot give consent to assisted dying under this legislation as per section 159. This is also not a matter that is able to be decided under the Guardianship and Administration Act, if a person has a guardian appointed or the Public Trustee is acting where the person has lost capacity.

The way it will work is that a person who is affected by disease or illness can make a first request to a medical practitioner for voluntary assisted death, strictly under the terms of the Act. The major purpose is to ensure consent is properly obtained and that prohibited drugs are controlled as per the Medicines and Poisons Act 2019.

A death under this Act is not a “reportable death” under the Coroners Act 2003, meaning it is not to be investigated or requiring an autopsy. Grim stuff but someone has to make these decisions!

Section 155 states that “technical errors” or minor compliance issues will not affect the ability of a medical practitioner to assist with the process of dying of a person.

The “effectiveness” of the Act will be reviewed after 3 years by the relevant minister.

Probably one of the most important sections is:

149 Protection for health practitioners and ambulance officers:

  1. This section applies if a protected person, in good faith, does not administer life sustaining treatment to another person in circumstances where:
    • the other person has not requested the administration of life sustaining treatment; and
    • the protected person believes on reasonable grounds that the other person is dying after self-administering or being administered a voluntary assisted dying substance in accordance with this Act.
  2. No civil or criminal liability attaches to the protected person for not administering the life sustaining treatment.

So, good protection for front line health workers.

147 Protection for persons assisting access to voluntary assisted dying or present when substance administered.

Criminal liability does not attach to a person only because:

  1. The person, in good faith, does an act or makes an omission that assists another person who the person believes on reasonable grounds is requesting access to or accessing voluntary assisted dying in accordance with this Act; or
  2. The person is present when another person self-administers or is administered a voluntary assisted dying substance under this Act.

There are however various offences for giving prescribed medicines without obtaining proper authority, inducing consent, giving false or misleading information. This has a potential penalty of up to 7 years imprisonment.

The act provides for a review of decisions to QCAT regarding a person seeking access to voluntary assisted dying. This is to determine eligibility to apply including whether the person had the required capacity to seek consent or there was coercion or other intervening issue. The person must be an Australian resident for at least 3 years prior to the application and a Queensland resident for at least 12 months.

The procedure requires a First Request and First assessment by a qualified medical practitioner and then a follow up second request and final assessment before the process of voluntary assisted dying can occur.

Medical practitioners and qualified nurses can administer the prescribed medicines to assist the voluntary assisted dying process.

The key is a determination of capacity to make the final decision:

11 Decision-making capacity

A person has decision-making capacity in relation to voluntary assisted dying if the person is capable of:

  1. Understanding the nature and effect of decisions about access to voluntary assisted dying;
  2. Freely and voluntarily making decisions about access to voluntary assisted dying; and
  3. Communicating decisions about access to voluntary assisted dying in some way.

The person is to be “suffering” meaning suffering, caused by a disease, illness or medical condition, includes a physical or mental suffering; and suffering caused by treatment provided for the disease, illness or medical condition.

10 Eligibility

A person is eligible for access to voluntary assisted dying if:

  1. The person has been diagnosed with a disease, illness or medical condition that is advanced, progressive and will cause death; and is expected to cause death within 12 months; and is causing suffering that the person considers to be intolerable;
  2. The person has decision-making capacity in relation to voluntary assisted dying;
  3. The person is acting voluntarily and without coercion; and
  4. The person is at least 18 years of age.

Under section 8, voluntary assisted dying is not taken to be suicide and this will have an impact on many life insurance policies.

Please call us today on 07 3839 7555 if you would like to know more about this Act.

Key functions of an Agreement to Lease and its enforceability

From both the perspective of a potential Landlord or a tenant, an Agreement to Lease is often an important document that can highlight key points that are in agreement, prior to a Lease being prepared. If done correctly, it can reduce the points of negotiation or amendment that may be necessary after the Lease, as well as the costs involved. However, if not properly drafted, a tenant or a landlord may find themselves either:

  1. unintentionally bound to a lease or lease terms; or
  2. being unable to enforce the Agreement once the other party decides to not proceed.

When should there be an Agreement to Lease?

An Agreement to Lease is common for both commercial and retail shop leases as it allows the parties to agree on key terms prior to a Lease being drafted. It is especially common when there are remaining conditions, which prevents the immediate start of a Lease including:

  • fit-outs or other works required by the Landlord or Tenant prior to commencement;
  • an existing Lease yet to expire; or
  • finalising the conditions required before a Lease can commence such as:
    • In a Retail Shop Lease – review of the Landlord’s disclosures;
    • Deposit requirements;
    • Bank Guarantee or cash bond; and
    • Evidence of insurances as agreed.

What is included in an Agreement to Lease?

While an Agreement to Lease serves as a precursor to a Lease to be executed (and registered if required), key elements should still be specified including:

  • Parties’ details;
  • Rent and review amount;
  • Estimated Outgoings and the tenant’s required contribution;
  • Term including any options for renewal.

If specific work or condition is required during the period between the signing of the Agreement to the Lease being formalised, then those conditions should also be specified within the Lease.

I have changed my mind since signing the Agreement to Lease – is it binding?

Whether an Agreement to Lease is binding on the parties will depend on if the agreement intends to bind the parties and if there are any conditions to be fulfilled beforehand.

Commonly, the Agreement to Lease will not be binding immediately on the parties but will instead be binding upon specified conditions being fulfilled. Examples of conditions, per the above paragraph, can include the tenant’s requirement to pay a deposit or the fit-outs being completed within a certain time frame.

In other cases, the Agreement may make it clear that no parties intend to be bound to the Agreement to Lease until the formalising and the signing of the Lease itself. In this case, the Agreement to Lease serves as a drafting tool for the Lease in the current points that are in agreement. Such Agreements may set out the rights of termination, including a right to terminate if a Lease is not formalised within a specified time frame.

Lastly, an agreement can intend for the parties to be immediately bound upon signing. In a Queensland case in Colvin v Lennard & O’Brien the prospective tenant withdrew from an agreement two days after signing an agreement to lease. The Court found that the agreement intended for the parties to be bound on the basis that the agreement:

  • contained all key terms including the property, the parties, the lease period (including the commencement date), rent & outgoings; and
  • contained signing clauses by both parties in the form of an execution page that was akin to an offer and acceptance.

While the agreement contained conditions to be fulfilled before the Landlord passed on the possession of the Premises, it had no conditions precedent for it to be binding.

As the landlord in the case was unable to find another tenant from July 2006 to January 2007, the tenant was ordered to pay the equivalent rent and outgoings plus interest totalling over $150,000 plus costs.

To avoid a similar catastrophe arising from an Agreement to a Lease, it is important to ensure that all key terms are highlighted and understood by seeking legal advice, especially as many agreements are prepared by one of the parties or a commercial agent that may be involved.

If you have any concerns before signing an Agreement to Lease and whether the agreement will be immediately binding on you, please do not hesitate to contact us at brisbane@perspectivelaw.com