Merry Christmas to all property buyers!

If there is one thing we know for certain, it is that the property market in Queensland is booming. As a result of this increase in Buyers, we have seen an increased election by Sellers to try their luck at auction. Whilst an auction can (and usually is) a thrilling event to attend, the process is very different to your standard property purchase process (inspection, offer, contract).

Below are 6 tips to help you navigate your way through buying real estate at an auction.

1. Do your Research

The most important thing to remember is once the hammer falls, you are locked into an unconditional contract (more about that below). You want to make sure that what you are buying is actually what you are getting.  Some big-ticket items worth considering are: zoning, similar property sales in the area, local government overlays and flooding and school districts. A lawyer will be critical at the pre-auction stage to assist with your due diligence investigations. 

2. Understanding your rights

The key point to remember when purchasing at auction is that the contract will be unconditional. This means that not only should you consider the financial implications of an auction purchase carefully, but you should conduct all your due diligence searches and building and pest inspections prior to attending on Auction day. Another critical point is that auction contracts do not offer the protection of a cooling-off period. This means you will have to settle even if you change your mind within 24 hours. You must also bear in mind that even if you enter a private treaty contract within 2 business days of an unsuccessful auction of that property, cooling off period still does not apply.

3. Obligations regarding deposit

Items of import to confirm prior to bidding would be the deposit amount (is it a percentage of the winning bid or a fixed amount) and the timing of payment. Non-payment of a deposit by the due date, is a breach of the contract and can have serious implications. You want to ensure before committing yourself at auction, that you can meet the financial obligation when it falls due. It would also be prudent if the deposit is a large sum whether your bank will allow the transfer by EFT in one sum, or whether you will need a few days to make the payment. The deposit is not deemed paid until the entire sum is received by the deposit holder.

4. Buying without a finance clause

As mentioned, the auction contracts are unconditional which means you do not have the benefit of a finance clause. We recommend obtaining a pre-approval with your bank and even sending them a copy of the draft auction contract prior to attending. Other steps you can take might include arranging a property valuation prior to attending so you have a better estimate of the funds the bank might be willing to lend. Short of these steps, you would want to ensure that you are comfortable with the amount you are able to spend prior to attending and to stick to that amount. All too often an over eagerness to “win” at auction, can mean you lose in the long run if you over commit financially, and can’t arrange the finance come settlement day.

5. Check the contract

At the inspection of the property, the agent will have a contract available that will become the Auction contract if the property sells. Prior to attending an auction, it is prudent to have a solicitor check over the contract which can be done by simply requesting a copy from the agent beforehand. There is limited scope to negotiate on an auction contract. You should also confirm with the auctioneer if any last-minute changes have been made to the contract prior to bidding (although they should announce this to you when the auction commences).

If you are attending an auction, contact  to assist with your pre-auction needs to help make sure you are ready and confident come the big day.

Insolvent Estates

Have you been nominated as an executor or are the next of kin for someone who has died without a valid Will? Did you know that, during his or her lifetime, they had a significant amount of debt? Are you concerned whether there are enough assets to repay the debt?

Before you take any steps in the estate administration, it is important to understand the key parts to administering an insolvent estate. (In this blog, the role of the executor or administration is collectively referred to as “the legal personal representative”). 

What is an insolvent estate?

A deceased estate is insolvent when there are insufficient assets to pay the liabilities of the estate.

In Queensland, an insolvent estate can be administered either under s s57 of the Succession Act 1981 (Qld) (“Succession Act”) or Part XI of the Bankruptcy Act 1966 (Cth) (“Bankruptcy Act”).

An insolvent estate will be administered under the Bankruptcy Act if there are debts of $10,000 or more (the current statutory minimum for petitioning bankruptcy) and the legal personal representative or a creditor seeks a sequestration order. In this case, the legal personal representative or the creditor can seek to have a trustee in bankruptcy appointed to administer the estate.

There are consequences for the legal personal representative failing to comply with the provisions of the Bankruptcy Act. For example, if the legal personal representative attends to payment or transfer of property of a deceased person after service of the petition for the sequestration order, he or she may be personally liable to the trustee in bankruptcy.

Further, it is an offence for the legal personal representative not to provide the Court and others with information regarding the personal affairs of the deceased and details of the estate administration.

Payment of debts in an insolvent estate

There are differences between administering an insolvent estate under the Bankruptcy Act or the Succession Act.

For example, under the Succession Act, the payment of funeral, testamentary and administration expenses take priority. Whereas, under the Bankruptcy Act, there are numerous other payments that are prioritised before the payment of estate expenses. A spouse must be careful of incurring debt for the deceased for estate expenses, as the trustee in bankruptcy will review and may reject them.

There are also provisions within the Bankruptcy Act to ‘claw back’ some transactions which occurred up to six months before the petition was presented. The Succession Act does not afford the legal personal representative the benefits in these provisions.

The Succession Act otherwise provides that the rules of bankruptcy apply with respect to the administration of insolvent estates.

Life insurance proceeds

If the assets of the deceased estate include life insurance proceeds, superannuation benefits and damages for personal injury, these are not liable to be applied or made available in payment of the deceased person’s debts. However, cases suggest that these assets may be applied towards debts arising out of the administration of the estate or debts personal to the legal personal representative.

Key points

If you are the legal personal representative of a deceased estate, then it is important to seek legal advice before taking any steps in the estate administration.

It is often recommended that the legal personal representative seeks an order for the administration of a deceased insolvent estate to the Federal Circuit Court or the Federal Court.

The legal personal representative should refrain from obtaining a Grant of Probate or Letters of Administration with/without the Will, as they may incur personal liability in circumstances where the deceased died with tax debts.

If you would like to speak with us about the administration of an insolvent or solvent estate, please contact Tony Crilly or Elizabeth Ulrick of our office on 07 3839 7555 or email us at

What you must consider before signing a Business Contract

Buying a business can be an overwhelming event for both the Buyer and the Seller and the opportunity to buy or sell at a price might seem simply too good to pass up. For this reason, many Seller or Buyer seek to jump into a contract too quickly, often without considering the fundamental aspects of the Business.

If issues are discovered after signing, it may lead to a substantial increase in legal fees to negotiate and to amend the contract. In a worse scenario, it may lead to a party being bound to complete a contract at a significant financial disadvantage.

Speaking to a lawyer before signing a business contract is always preferred, especially in Queensland where the agreement is not a REIQ contract. However, there are some key areas in which you should ensure mutual understanding with the other party, before signing a Contract.

  1. Correct Entity Details

This is not always obvious, as either party may be unaware of the actual buying entity to begin with. Both parties will need to be sure that the correct entity is stated in the contract. For instance, is the Seller as owner of the business an individual, a trustee, an estate, a partnership, or a company? The Seller should be clear on the exact entity that owns the business name and assets, as the contract terms require the Seller to warrant that they have the ability to sell the assets.

Speaking to your accountant to ensure all entity details are correct is crucial.

  1. Purchase Price

The Purchase Price is also not as obvious as it appears. If the Buyer and Seller agree about the Purchase Price (and the deposit), consider is the price to be paid at the Completion Date, or in instalments? Does the Purchase Price include the stock, or will that be assessed before completion and be added onto the price? Is there an earn out of pending contracts part of the sale price, meaning if they are not achieved is there an adjustment to the Price? All these issues should be clarified between the parties before the entering the agreement.

  1. Key Dates and obligations leading up to Completion

The obligations between the parties in a Business Contract will differ on a case-to-case basis but can include negotiations on:

  • a Buyer’s finance condition.
  • a Buyer’s requirement to review the books and financial records of the business.
  • a tuition period by the Seller prior to or after completion.
  • due diligence searches to the buyer’s satisfaction of the business and assets.
  • if there is a lease, the terms of the current lease.
  • reviewing the list of business employees and their existing entitlements; and
  • reviewing the list of plant & equipment to be included in the business sale (and what is being excluded).

The parties will need to agree on a reasonable date for confirming each condition, as well as the Completion Date.

  1. Post Completion Obligations

The parties may also agree on further obligations after Completion, including the requirement by the Seller to assist in the Business (usually unpaid, but sometimes as a paid consultant) for a set period. The Seller should ensure that reasonable terms for the assistance (such as a maximum number of hours of assistance per day or week) whether by phone or in person are specified.

The Buyer and the Seller should also agree going into the Contract, the details of a restriction on the Seller after completion of competition, preferably by customers, suppliers, the area from the Business and the period.

These steps should be considered by both parties and discussed before a business contract is prepared or signed. If a contract is already prepared, to ensure that all terms between parties or the terms represented by the Seller or the agent are in included the contract, we recommend that you seek a review of the Contract by a qualified lawyer.

If you would like to speak with us about entering a business contract, please contract Tony or Jake our office on 07 3839 7555 or email us .

Testamentary Discretionary Trusts

Quite often a client will come to us and say they have heard about a Will that provides for a ‘testamentary discretionary trust’ and they want to know if it is necessary and what it means.  This blog answers the seven main questions we are asked about testamentary discretionary trusts.

1. What is a testamentary discretionary trust?

A testamentary discretionary trust is simply a trust which is established in a Will.  The beneficiaries receive their estate distribution on the terms of a trust rather than in their personal name. 

The trustee has the day-to-day control of the trust.  An independent trustee can be appointed or the Primary Beneficiary can be the trustee of their own trust, either on their own or jointly with another person.  

There are two main benefits:

  • Asset protection
    • A beneficiary does not own the assets in a testamentary trust which means that creditors will generally not be able to access the assets of the trust;
    • An independent trustee can be appointed if the assets are at risk, such as through the beneficiary suffering from a gambling problem or drug dependency;
    • The trust can offer protection from a family law breakdown;
    • The trust can be drafted such that a person is deemed ineligible to act as trustee if they are declared bankrupt;
    • To best safeguard assets, a will-maker might consider appointing two trustees and two appointors.
  • Taxation advantages including:
    • Minor beneficiaries are taxed at normal adult rates on excepted trust income rather than at the penalty rates that usually apply to minors.  Income earned on assets forming part of the trust will generally be ‘excepted trust income’;
    • The trust can be used to stream different categories of income to different beneficiaries;
    • Income can be distributed to beneficiaries whose marginal taxation rate is low;
    • The class of beneficiaries can include tax-exempt entities.

The trustee can remain in place for up to 80 years or earlier if the trustee decides to vest the trust.

2. Do I need to set it up now?

The terms of the trust form part of the Will.  However, the testamentary trust only comes into operation after the testator’s death.  After signing the Will no further steps need to be taken until the testator dies.

3. What are the ongoing costs of the trust?

The trust will need a tax file number and tax returns will need to be lodged each financial year.  There can be associated accounting costs.

4. Is my estate large enough to warrant setting up a trust?

Regardless of the size of the estate, the trust still offers asset protection and tax advantages.  As long as the ongoing costs of the trust are not disproportionate to the benefit and your assets form part of your estate (property held as joint tenants and assets held by a family trust for example for not form part of your estate) the trust can be advantageous.

It is also possible to give beneficiaries (once they have reached the preservation age) the option of whether they take their distribution personally or on the terms of the testamentary discretionary trust.

5. Will the trust make it complicated for my Executors?

The trust does not need to be complicated.  At Perspective Law we take the time during the estate planning process to ensure our clients understand the terms of the trust and that it upholds their wishes.  We also assist beneficiaries of deceased estate and can provide guidance in relation to the setting up of the testamentary trust, including referrals to accountants or financial advisers.

Most of our clients feel at ease after completing their estate plan and knowing their Will reflects their wishes and provides tax advantages and asset protection for their beneficiaries.

6. Is the cost of preparing the Will worth it?

The cost of drafting a Will which includes testamentary discretionary trust is more expensive than the cost of a simple Will.  However, the testamentary trust can result in significant tax savings for your beneficiaries.  The asset protection also makes the Will an investment.  If, for example, estate assets are distributed to a beneficiary in their personal name and they have been declared bankrupt, the assets will vest in the bankruptcy trustee.  This alone makes the Will worthwhile.

7. I already have a family trust – can I just use that?

It is possible to name family trusts as a beneficiary of the estate.  However, assets that pass into a testamentary trust are subject to a much lower tax rate.  Entitlement to concessional rates of tax will generally be limited to income from the transferred assets and not from assets subsequently acquired.  This is different to a testamentary trust where all the income of the trust estate can be taxed concessionally.

Other considerations include:

  • The vesting date of the family trust will be sooner than the possible vesting date of any testamentary trust as the trust does not come into operation until the testator’s death;
  • There can be uncertainty around the control of the family trust at the time of death;
  • Alternatively, the family trust can be an eligible beneficiary of a testamentary trust and distributions can be made to the family trust from the testamentary trust.

To discuss further, call Lauren Nolan now or email us at

Property Contracts- Correct Purchaser?

In the Queensland property market, solicitors are often an afterthought when it comes to commencing the sale or purchase of a residential property. Unfortunately, by the time “legal” gets subbed into the game, the agent has already scored straight down the middle with the contract signed sealed and ready to be delivered. The result can often be problematic, particularly if you are dealing with a more complex transaction.

An issue that comes up more often, is having the correct name on the contract.  Often, this is due to a fundamental misunderstanding of the process and the importance of having this decision made prior to signing. The liability for stamp duty attaches to the entity from the time the contract is signed (not when the contract goes unconditional, or when it settles). Particularly for buyers, once the contract is in place, varying the purchasing entity can have adverse implications for stamp duty (read here: doubly duty). Should you find yourself in a situation, during the contract, where you advise that the name on the contract needs to be changed as “it was always meant to be purchased in the trust, but the seller said we needed to sign urgently and the trust wasn’t set up yet”, careful consideration is required.  

The most important thing to do in this situation is to act promptly. Depending on how much time has passed since the matters genesis, and the severity of the change required, you may be able to withdraw from the contract under the cooling off period. This carries the risk of the seller requiring a termination penalty so may not be desirable in all circumstances. The most common course of action however,  while the contract is unconditional, will be to make a request with the other side to enter into a deed of rescission. This secures the property, while the correct contract is drawn up and executed by the (correct) parties. 

The problem with this approach is that it relies strictly on mutual agreement between the parties. In a Sellers’ market, this approach is not always successful. If the seller refuses, and the contract is unconditional, the buyers have no choice but to complete the purchase or risk losing their deposit.

How can this issue be avoided you might ask and I offer three words: Review, Collaboration and Education.

First and foremost contract reviews. This is the most obvious route to success as it allows the solicitor to pick up the omission or error before it becomes a problem.

Collaboration, with agents, clients, the accountant and (the other side to the extent permitted by law) to ensure everyone is engaged once the issue arises. Often dealing directly with the agent at the outset to clarify entity with them, goes a long way towards securing a successful outcome. The agent is the indispensable connector, they are the go between for the buyer and seller and often have a better relationship with both parties. They also have a vested interest in a successful outcome.  Collaboration is also important with client and lawyer. Discussing the issues with the purchaser directly so they understand exactly the stamp duty issues as they arise (and before they become disastrous), can often lead to a more thorough, considered and effective solution.

Finally education. Advising the agent early first and foremost is so important. It is usually an agent who will prepare the contract, so giving clarity to an agent as to stating the correct purchaser is critical and helps a long way in preventing a ‘repeat’.  The value of having a solicitor review the contract prior to signing cannot be understated.

Please contact our office today to speak with Katherine Blood on 07 3839 7555 if you wish to discuss your contract or via

Recovering Land Tax – Points to Consider for Tenants and Landlords

As land tax can be a significant expense for investment property owners, when considering a lease, it will be of interest for both the potential lessor and the tenant whether the land tax can be recovered from the tenant as an outgoing.

The following chart lists a simplified set of questions and outcomes for landlords and tenants to consider when looking at land tax.

A. Residential or Retail Leases

Tenants in a retail shop lease cannot be required to provide land tax by the landlord. While landlord’s outgoings can be recovered in retail shop leases, clause 7(3) of the Retail Shop Leases Act 1994 (Qld), specifies that land tax cannot be included as a recoverable outgoing.

In residential leases, the Lessor must pay all charges, levies, premiums, rates or taxes for the premises, which includes council rates and land taxes, per clause 163 of the Residential Tenancies and Rooming Accommodating Act 2008 (Qld).

B. Leases that commenced between 1 January 1992 to 30 June 2009.

Commercial leases that commenced during the period between 1 January 1992 and 30 June 2009 cannot recover land tax from the tenants, even if there are provisions in the lease that allows for it.

However, per the decision in Vikpro Pty Ltd v Wyuna Court Pty Ltd [2016] QCA 225 in leases that commenced during this period, with land tax arising on or after 30 June 2010 which has: –

  • already been paid by the tenant, then that amount can be retained by the landlord and the tenant cannot seek to recover the land tax already paid; or
  • been ordered by the court to be payable by the tenant, that order can still be enforced.
  • Leases after 30 June 2009

Since the decision in Vikpro Pty Ltd v Wyuna Court Pty Ltd and a legislative change in 2017, landlords in commercial leases that commence after 30 June 2009 will be able to recover land tax arising from 30 June 2010 onwards, as long as the lease permits it.

Potential tenants seeking to enter into a lease requiring contributions of outgoings, including land tax should ensure that they receive sufficient disclosures on the anticipated costs, including by seeking a land tax clearance search.

If you have any questions about a commercial lease and the recovery of land tax, please call us on (07) 3839 7555.

Common Estate Planning Traps to Avoid

As with most estate administration matters, we see clients that are left with difficult circumstances after their parent has passed away. Sometimes, those clients are survived by step parents, who were married to the deceased parent for only a short duration and had no biological children together.

Common issues that arise during the course of these matters, include: the deceased parent failing to leave a valid Will or failing to execute a valid binding death benefit nomination for payment of their superannuation death benefits. The clients are left to deal with these complicated issues, which can lead to disputes and causing legal and accounting fees to be unnecessarily incurred.

Steps can be taken during your lifetime to ensure that your family is safely provided for on your death. Below is a non-exhaustive list of common estate planning traps to avoid.

  1. Marriage (and civil partnership) revokes a Will

A Will is revoked by the marriage of the testator. If a testator enters into a civil partnership, their Will is also revoked.

However, if the Will contains gifts of property to the spouse of the deceased at the date of death (or other dispositions of property), or appoints the spouse as Executor (or as Trustee, Guardian or any other appointment), then the Will is not revoked to that extent. They may be left with the power to distribute assets to themselves which could be unintended.

To avoid this mistake, consider whether a Will should be made in contemplation of marriage. Generally, the solemnisation of the marriage will not revoke the Will.

  1. Divorce or annulment (or end of a civil partnership or de facto relationship) revokes a Will

If a testator’s marriage ends by divorced or is annulled, and their Will contains dispositions of property to the former spouse, or appointments of the former spouse, then these provisions are revoked.  For example, a gift of real property to a former spouse is revoked and the gift takes effect as if the former spouse had died before the testator.

There are some exceptions. For example, appointments of the former spouse as Trustee of property for minor children of their marriage, will not be revoked.

The effect of termination of a civil partnership or the ending of a de facto relationship on a Will, is the same as those effects for divorce or annulment.  

An important tip is to ensure a Divorce Order is obtained from the Family Court. Otherwise the former spouse is still considered a spouse of the testator.  

  1. Death Benefit Nominations

You can provide the Trustee of a Superannuation Fund with a death benefit nomination (which can be binding or non-binding) for payment of your death benefits. The death benefits can be paid to the legal personal representative (i.e. Executor or Administrator) or a dependant or dependants of the member.

The legislation provides a nomination ceases to have effect three years after the day it was first signed by the member. If the nominations lapses, it may be deemed non-binding and the trustee has discretion to pay the death benefits as it sees fit.

If a member struggles to remember to renew their death benefit nomination, consider rolling the funds into a Self-Managed Superannuation Fund, which enables a member to make a non-lapsing and binding nomination (provided the trust deed expressly allows it). Accounting and tax advice should be obtained to consider whether a Self-Managed Superannuation Fund is suitable for individual circumstances.

  1. Tenants in Common and Joint Tenants

When purchasing real or personal property with one or more persons (or entities), you will need to consider the form of ownership.

An important factor to consider is whether to hold property as “tenants in common” or “joint tenants”. Tenants in common hold their interest in the property separately. Their interest is registered on title as a fraction of ownership.

This means that on the death of one of the tenants, their interest in the property forms part of their estate and is distributed in accordance with their Will.

If property is held as joint tenants, then on the death of a joint tenant, their interest vests automatically in the surviving joint tenant. Their interest will not form part of their estate on death. This is not often discussed during a conveyance and can have devastating effects at the time of death.

Holding property as tenants in common can mean that beneficiaries will need to commit to owning property with another person (or entity), which may be a partnership if it is a commercial or residential investment property.

If the circumstances do not allow for those beneficiaries to receive the cash equivalent of the deceased’s interest in that property, they will end up holding the deceased’s share in the property, proportional to their share of the estate.

If you would like to plan your Will and avoid these and other devastating estate planning traps, please do not hesitate to call Tony Crilly or Elizabeth Ulrick on 07 3839 7555 or email us

If you want 24/7 answers, please go to our website and click on the section “Start your estate planning now”.

If you have an estate to discuss, please click on the link “Start your estate administration now”.

Debts and Statute of Limitations

Ever wanted to know the best way to secure a Loan to your children for purchase of their home?

Make sure that you have a formal Loan Agreement with conditions or a term for repayment and it is not just in writing and repayable on demand.

Have you ever wondered how long you can be chased for a debt or how long you have to recover your unpaid debts?

In most states in Australia, the limitation period for debts is for six (6) years, except in Northern Territory where it is for three (3) years. This means that the creditor can pursue the debt from six (6) years from the date of when:

  1. The debt became due and payable; or
  2. The last date a payment was made towards the debt; or
  3. The date the debtor acknowledged in writing that they owed the debt.

It is imperative that you get the calculations correct, as failure to establish the limitation period, may mean that you will be unable to successfully recover your debt and the debt will become statute-barred.

A statue-barred debt is when the debt becomes older than the limitation period in your State or Territory (being six (6) years in all states in Australia, except in Northern Territory where it is three (3) years). Therefore, a creditor will no longer have legal right of recovery for a statue-barred debt. However, if the debtor acknowledges the debt in writing, or makes any payments towards the debt, then this resets the clock on the six (6) year limitation period.


We recommend a formal Loan Deed and Mortgage registered on title to the property. That way, it is very clear the legal rights of enforcement should the child divorce or die and the property becomes part of a dispute. Call us today on 07 3839 7555 if you would like to discuss this further.

Buying Off the Plan Developments: Buyer Beware

The economy has bounced far better than everyone expected and this has resulted in a surge in property buying. As the economy expands, the more frequent speculative option of buying “off-the-plan” has become . Instead of trawling through open homes to find the diamond in the rough, you might get in on the ground floor  by choosing your property from computer generated plans and images in a new  development. Whilst this can offer a great opportunity, there are some warnings that need be considered. Here are some of our top tips for off the plan purchases!

  1. Builder: The builder (as distinct from the seller) will be the person responsible for the actual bricks and mortar work. Quality between builders can be as stark as black and white so you want to make sure that the builder you are signing up with has a good reputation. Check some of there previous builds. How is there rating on social media? You should give us a call to see if they have any pending litigation against them.
  2. Display Unit: Not all developers use a display unit, but if they do, be sure to do a thorough inspection and take lots of photos! Get a sense of how the layout feels in real life as this is hard to gauge from architectural drawings. Note the size of the rooms, specifications and location of appliances. Even small things are important such as the way the toilet is facing in the bathroom. For small units, this can be critical!
  3. Completion Date: The hardest thing to get used to when buying off the plan is the lead time between putting ink to paper and getting those beautiful new keys (or, more commonly, access codes). I have never met a more optimistic group than the developers of these projects. Take the estimated completion date and double it. “We are hoping for practical completion by March” – assume they mean by Christmas. This is not usually an issue, if you plan accordingly. But whatever you do, don’t give notice to your landlord just yet.
  4. Sunset Date: This is the date under the contract that the project must be completed by (this can give you a time frame for completion from the anticipated completion date to the sunset date). But beware, most contracts contain a provision that allows for the sunset date extension which is at the seller’s discretion. In other states, there are statutory restrictions on the sellers right to terminate under a sunset clause.  In Queensland it is a maximum of 5 years 6 months. This will usually happen where a sunset date is reached and, under a booming property market, the price the Seller received for the contract some years ago is way under the current market value.  Although some protections exist in legislation the contract should be reviewed by a solicitor prior to signing to ensure you will not be stranded come sunset date!
  5. Deposit: It is common that a deposit is paid to secure your interest in the property. We have seen deposits range anywhere from $1,000.00 to 10% of the purchase price. On a 4-million-dollar unit for example, that is a lot of cheddar. It is important, therefore, to ensure that the deposit remains in the Agent or Seller solicitor trust account, and not released to the Seller. Should the contract not proceed, you want the deposit to be readily available for refund.
  6. Disclosure Statement: this is a requirement of the Seller and must contain their names and addresses, identify you as the buyer, identify the unit you are buying and put in writing their claims and promises about your prospective title. It will usually contain a draft strata plan showing the proposed location of your unit (your proposed lot), and its position relative to the rest of the building. It includes expected body corporate adminstration and sinking fund levies. This is useful to consider where you are for the purpose of access to other facilities in the building including any views that you might get and natural light into the building. It is also important to consider, if you have an included car park or storage facility, where your lot is relative to those features. This will not always be available at the time you sign the contract.
  7. Finishes: The contract will contain a schedule of fixtures and finishes. A detailed schedule is important to manage your expectations as to the finished product. Comprehensive review of this document will help avoid arguments and disappointments on completion.
  8. Changes: Contracts are drafted for the benefit of the Seller and usually allow a lot of changes (often without consultation with or fiscal reparations to the Buyer). These can be anything from alteration of the schedule of finishes, altering dimensions of the property, total number of units in the building and location of the lots, address of the property and location or creation of easements. In Queensland however, a change to the initial disclosure statement that will cause material prejudice (think significant disadvantage), you may have a right to terminate  provided you act within the time limits. (30 days after you receive notice of the change or before settlement).  
  9. Defects: Defects need to be notfied  within specific time frames and the contract should provide for a procedure in this regard. Check the contract to ensure you have sufficient time to discover and raise issues (no less than 3 months ideally).
  10. GST: whilst most contracts will quote the price inclusive of GST for residential units, it is important to make sure this is the end of the story. A review of the GST clause in the contract is essential as you do not want to end up with a 10% shortfall come settlement. 
  11. Insurance: In Queensland, we have a statutory building regime that protects new homeowners from defects in building works, or failures to complete the build. However, it is important to note that the cover  will not cover multiple unit dwellings of more than 3 storeys. Body coporate insurance is madatory but searches will reveal the extent of the insurance policy. Teinterior of the ujnit and claims for public liability are up to you as the buyer so make sure you get insurance cover, including all appliances.
  12. Construction: the agent will be a good source of updates during construction, so keep in touch with them throughout the process as they will have an idea if the build is on schedule. They have a vested interest in ensuring your matter reaches settlement!
  13. By-Laws: Most contracts will contain a draft of the building rules (By-laws). Make sure you review these carefully and consider if they will suit your living arrangements, especially in regard to pets.
  14. Stamp Duty: this is payable on top of the purchase price and usually represents a significant contribution to the Buyers costs. This will be due and payable 30 days after the contract becomes unconditional or on settlement whichever is sooner. Usually, off the plan contracts will not become unconditional until either registration of the plan and issue os titles and certification for occupation has occurred. Remember to check with your solicitor prior to signing.
  15. Finance: This is an important (and often overlooked) consideration, especially when your contract may span several years. Whilst pre-approvals are a great indication of your ability to complete at the time of contracting, be warned – they have expiration dates. Most top tier financiers attach a 90-day acceptance period in which to go from formal approval to settlement. After this time, you run the risk of needing to reapply and your circumstances changing. Including a finance clause which is timed based on the registration or final certification date is the safest way to ensure you have the funds to complete or an out if necessary. 

If you are thinking of investing in an “off-the-plan” unit, contact Katherine of our office for a comprehensive review of the contract prior to singing. Email Knowing your rights and obligations now, can go a long way to saving some headache and heartache in the future.

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 or call direct on 07 3317 4306.

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