Cooling Off Period
The standard REIQ contract is subject to a cooling off period for the benefit of the Buyer.
The Buyer’s cooling-off period commences when the Buyer or their Lawyer receive a copy of the signed Contract, whichever is the earlier and expires within 5 business days.
The Buyer may terminate the Contract at any time before the cooling-off period ends. However, if they terminate the Contract during the cooling-off period you must, within 14 days after the Contract is terminated, refund to the Buyer any deposit paid under the Contract, less 0.25% of the purchase price. You may retain the .25% of the purchase price.
Time of the Essence
The contract provides that “time is of the essence”. This means that performance of a contractual obligation, for example, obtaining finance or completing settlement by a specified date must be strictly adhered to. If the obligation cannot be met by the specified date, then an extension of time must be formally requested. Sellers are under no obligation to provide any extension of time and may elect to cancel/terminate the contract. In some circumstances, the sellers may be able to sue the buyer for damages and/or specific performance.
If it becomes necessary to extend the settlement date, the sellers are at liberty to charge penalty interest on the balance purchase moneys for each day settlement is not able to be completed.
It is therefore very important when signing the Contract, that dates are checked to ensure that time frames are reasonable.
Buyers Inspection
In most cases, the Contract for sale of a dwelling house will be subject to a Buyers Inspection which includes building and pest reports. The purpose of this report is for the buyer to inform themselves as to whether there are any structural defects in the property. The buyer must act reasonably.
From time to time, it is not uncommon for prospective buyers to seek a reduction in price as a consequence of a building report where there are No structural defects although the report may note certain issues such as a nonworking solar hot water system. Whilst these items may be costly to the buyer, it is not a structural defect and should not be relied upon to terminate the Contract. Nor is the Seller under any obligation to either repair, replace or reduce the purchase price.
Special Conditions
A seller may be asked to agree to certain special conditions. These are additional clauses not covered in the Standard Terms and Conditions attached to the Contract such as a “subject to sale of buyer’s property” clause. If so, a Seller may also request that a “sunset clause” be inserted. This means that your property will not be taken off the market whilst waiting for your buyer to sell their property and if another buyer makes an offer on better terms than the first buyer, the Seller may give the first buyer the option to deem their Contract unconditional or match the terms of the second Contract (eg cash no finance) and proceed with the sale or alternatively, terminate the Contract so that the Seller is in a position to enter into the second Contract.
Unregistered Dealings
If the property is subject to a registered or known unregistered encumbrance or interest which is not disclosed in the contract, the buyer may terminate the contract or claim compensation.
Under the terms of the contract, unless otherwise agreed between you and the buyer, any fixtures, fittings or chattels not included in the sale which are left on the premises after settlement has been effected will be deemed to be abandoned by you and the buyer may appropriate, remove or dispose of the same. Any costs incurred by the buyer in the removal of such property may be recovered against you.
Approved Electrical Safety Switch
Under the provisions of the Electricity Regulation 1994, the sellers are obliged to advise buyers in writing whether or not an approved safety switch for the general purpose socket outlets has been installed in the residence.
Smoke Alarms
Under the Fire and Rescue Service Amendment Act 2006, the required number of smoke alarm/s which comply with Australian Standard 3786 must be installed in every domestic dwelling and you are obliged to notify the buyer in writing as to whether they have been installed or not.
Insurance
The contract provides that the property is to be at the buyer’s risk from 5pm on the next business day after the date of the contract, although, whilst continuing in possession, the seller is required to use the same with reasonable care and may not do anything regarding the property (or tenancies) that may significantly alter them or result in later expense for the buyer. This means that if the improvements on the property and/or any chattels were destroyed before settlement, the Buyer would still be obliged to complete the purchase. However, we recommend that sellers do not cancel building and contents insurance until after settlement has been effected.
Items Included in Sale
Items which are included in the purchase price are all stoves, hot water systems, fixed carpets, curtains, blinds and their fittings, clothes lines, fixed satellite dishes and television antennae and in-ground plants.
Personal Property Securities Register
The Seller must give title to the property free from all encumbrances. This obligation includes providing a release of any security interest over goods or chattels included in the property being sold.
If any security interests relate to goods or chattels being sold with the property, it may be necessary to obtain a release from the secured party of those goods and/or chattels.
Pool Safety
What is a “swimming pool”
A regulated swimming pool is any excavation or structure capable of being filled with water to a depth of 300mm or more including a pool, spa pool/tub or wading pool, but generally does not include a fish pond (or similar ornamental water feature), dam, water tank, watercourse, spa bath in a bathroom (unless continually filled with 300mm or more of water) or birthing pool.
Non-shared pool – obligation to obtain Pool Safety Certificate
Where there is a pool on the property (or on adjacent land used in association with the property) that is a non-shared pool and there is no Pool Safety Compliance or Exemption Certificate in effect, the seller must not enter into a contract to sell the property without giving a Form 36 Notice of No Pool Safety Certificate.
If the Buyer completes the purchase without obtaining a current Pool Safety Compliance or Exemption Certificate at settlement the Buyer becomes responsible for obtaining a Pool Safety Certificate within ninety (90) days of settlement and are also responsible at their cost to carry out all works required (e.g. upgrading the pool fence) to meet the pool safety standards currently in force.
If you have any questions or would like to speak with one of our solicitors, please contact us.
