Understanding House Contract Terms in Queensland

Key conditions you should know before signing a contract to buy property

3 Ways to Make an Offer

Once you have found the property you want to buy, the selling agent will usually need you to make an offer covering the standard contract terms (purchase price, proposed settlement date, and contract conditions). You can make the offer in one of three ways:

• a verbal offer
  
• an informal written offer, usually via email
• a formal written offer, presented as a signed contract to the seller. If it’s accepted and signed by the seller, it’s legally binding.

No matter how you make the offer, but especially if you make a formal written offer, you need to be aware of exactly what contract terms you are agreeing to.

We have outlined below a simple explanation of common contract terms that buyers are typically not aware of.

Remember, we offer free contract reviews to buyers – contact us before you sign anything to make sure you get what you’re expecting.

Contract terms you need to know

Ensure Legal and Financial Accuracy – “Buying entity”

The contract defines the “Buyer” as the party or entity as set out in the contract schedule. You need to check and confirm your details as listed in the contract – it may seem obvious, but a minor misspelling of your name or incorrectly identifying a trust company or ACN can cause a major headache when it comes time to obtain finance and settle.

You should also obtain financial and legal advice to ensure you are purchasing the property in the correct entity as well.

Protect Your Purchase with This Clause – “Subject to finance”

By ticking the “subject to finance” box in the contract schedule, the purchase of your property is subject to you obtaining financing within the specified period of time (usually 14 days). Most contract are signed “subject to finance”, which gives you the certainty and comfort of knowing that the seller can’t sell the property to another buyer while you get confirmation from your bank or mortgage lender that you have the money you need for the purchase.

Know What You’re Buying – “Subject to building and pest inspection”

Similar to the “subject to finance” condition, if the “subject to building and pest inspection” box of the contract schedule is ticked, you will have a certain period of time in which to have the property inspected by a licensed building and pest inspector (the time is identified in the clause and it’s usually 14 days).

We recommend that buyers include this clause, so you have the peace of mind of knowing the property can be properly checked for problems before you commit to buying it. If you find serious issues, you can cancel the purchase, or you may be able to renegotiate a reduced purchase price to cover the cost of fixing the issues.

Deadlines Are Strictly Enforced – “Time of the essence”

This contract term is generally expressed in most contracts in Queensland. It means that, where the contract provides for things to be done by a certain date, you must do it strictly within that time period. If you fail to do that thing within the time period, you will be in breach of the contract and the seller will usually have the right to terminate.

When Deposits and Final Payments Are Due – “Payment terms”

The contract should set out when:

• any initial deposit is payable
• any balance deposit is payable
• the balance purchase is payable.

You should keep in mind that the initial deposit is usually payable when you sign the contract, and the balance purchase price is payable at settlement. If you fail to pay money when due (including the deposit) you will be in breach of the contract and the seller will generally have the right to terminate the contract.

Who Is Responsible If Something Goes Wrong? – “Property risk”

The standard terms of contact in Queensland usually provide for the risk in a property to pass to the buyer, not from the settlement date, but from 5pm on the first business day after the date that the seller signs the contract.

This means if anything should happen to the property, you as the buyer may be responsible for it – even though the settlement is not complete.

You should insure the property from the date the contract is signed. The type of insurance you need to take out will depend on the type of property you’re purchasing.

What’s Not in the Contract Doesn’t Count – “Entire agreement”

In the fine print of most contracts in Queensland, there is a standard term which states that the contract contains the entire agreement and anything else is expressly excluded. You therefore need to ensure that the contract reflects the actual agreement you have made with the seller, and includes any representations or promises that may have been made to you to induce you to entering into the contract.

Tailoring the Contract to Your Needs – “Special conditions”

Special conditions are unusual terms not included in the standard contract terms. Where there is something unusual about your purchase, you may need to address a special condition. We strongly recommend you discuss special conditions with your conveyancer.

Why You Should Review House Contract Terms Carefully

A standard contract may seem straightforward, but each clause can carry serious legal implications. For example:

• Missing a key date can mean losing your deposit.

• Accepting unclear inclusions may leave you without items you assumed were part of the sale.

• Ignoring minor special conditions may later block settlement or cost you thousands.

Having an experienced Cairns conveyancing solicitor review and explain your contract gives you peace of mind and legal protection.

Frequently Asked Questions – House Contract Terms

Can I add extra conditions to the contract?

Yes. Through special conditions, buyers can add terms such as “subject to sale of my current home” or “subject to satisfactory valuation.” These must be clearly worded and agreed upon by the seller.

What happens if I miss a finance or inspection date?

You may lose the right to terminate the contract. It’s essential to notify the seller by the due date or request an extension through your solicitor.

Can I negotiate the settlement date?

Yes, the settlement period is negotiable before the contract is signed. Standard is 30 days in Queensland, but longer or shorter periods can be agreed.

Are house contract terms different for auctions?

Yes. Properties sold at auction are usually unconditional, meaning no finance or inspection clauses apply. Legal advice should be sought before bidding.

What if something isn’t listed as an inclusion?

If an item is not clearly stated as an inclusion in the contract, it may legally be removed by the seller. Always confirm in writing.