Understanding the REIQ Contract: Key Changes and How to Fill It Out Step by Step

From 20 January 2022, several important changes were introduced to standard residential property contracts in Queensland, specifically the REIQ COntract. These amendments were implemented by the Real Estate Institute of Queensland (REIQ) in collaboration with the Queensland Law Society in response to the property boom during the pandemic.

The changes to the REIQ Contract impact various aspects of property transactions, including contract extensions, pool compliance, smoke alarms, and seller warranties. These updates place greater compliance obligations on sellers while also offering new protections to buyers.

Below, we outline the most significant changes and provide a step-by-step guide on how to correctly fill out an REIQ Contract when buying or selling a property in Queensland.

Key Changes to the REIQ Contract

1. Contract Extensions: More Flexibility for Buyers and Sellers

Under the new rules, both buyers and sellers now have the right to extend the Settlement Date by up to five business days without needing the other party’s consent.

Key Benefits:

• Provides flexibility in cases where banks or lenders delay settlement.
• Reduces the risk of contract termination due to unexpected delays.

Previously, any extension required mutual agreement, which often led to complications for buyers facing last-minute financing issues.

2. Pool Certificates: Compliance at Settlement

Sellers must now provide a pool compliance certificate for any private pool at the time of settlement.

Exceptions:

• If the seller provides a Notice of No Pool Safety Certificate before contracts are exchanged, they are not required to supply a compliance certificate.

Buyers should ensure this requirement is met before settlement to avoid potential compliance issues post-purchase.

3. Smoke Alarm Compliance: Financial Implications for Sellers

The REIQ Contract now includes an obligation for sellers to install compliant smoke alarms by the Settlement Date.

If the seller fails to comply:

• The buyer is entitled to a financial adjustment of 0.15% of the purchase price at settlement.
• Buyers must claim this adjustment in writing before settlement; otherwise, the right is lost.

To avoid delays, buyers should check smoke alarm compliance well before settlement and discuss any issues with their conveyancer.

4. Seller Warranties: Additional Protections for Buyers

Sellers now warrant that, as of the Contract Date, they have not received any communication from a regulatory authority that could result in:

• A show cause notice
• An enforcement notice

If a seller breaches this warranty and the buyer discovers the issue before settlement, the buyer has the right to terminate the contract.

Buyers should conduct due diligence and verify that no outstanding issues exist with the property before proceeding with settlement.

Step-by-Step Guide to Filling Out an REIQ Contract

Correctly completing an REIQ Contract is essential to ensure a legally binding and enforceable agreement between buyers and sellers. Here’s a step-by-step breakdown of the key sections:

Step 1: Insert Property Details

• Property address
• Lot and plan details
• Title reference number

Ensure this section matches the information recorded on the property title to prevent delays in processing the contract.

Step 2: Specify the Purchase Price and Deposit

• Enter the total agreed purchase price.
• Outline the deposit amount (usually split into an initial and balance deposit).
• Indicate when the deposit must be paid (e.g., upon signing the contract or within a set timeframe).

Step 3: Select the Finance Condition (if applicable)

• If the purchase is subject to finance, include:
  • The lender’s name
  • The loan amount
  • The approval date
• If purchasing unconditionally, mark the appropriate section.

Step 4: Include Building and Pest Inspection Conditions

• If the contract is subject to a building and pest inspection, specify the inspection deadline.
• The buyer has the right to withdraw if significant defects or infestations are discovered.

Step 5: Set the Settlement Date

• Confirm the Settlement Date, typically 30-60 days from the contract date.
• If an extension is needed, ensure it falls within the five-day allowable period.

Step 6: Confirm Inclusions and Exclusions

• List items included in the sale (e.g., appliances, fixtures, pool equipment).
• Specify any exclusions the seller will remove before settlement.

Step 7: Review the Special Conditions

• If either party has additional terms (e.g., early possession, seller rent-back agreements), they should be clearly listed.
• Sellers and buyers should seek legal advice before adding or accepting special conditions.

Step 8: Sign the Contract

• Both buyer and seller must sign the contract.
• Witness signatures may be required in some cases.

Once signed, the contract becomes legally binding, and buyers must fulfill all conditions outlined within it.

Why a Properly Prepared REIQ Contract Matters

A correctly prepared REIQ Contract protects both buyers and sellers by ensuring:

• The transaction is legally binding and enforceable.
• Both parties understand their rights and obligations.
• The risk of disputes or delays is minimized.

Failing to prepare the contract correctly can lead to:

• Settlement delays
• Financial penalties
• Contract termination

For peace of mind, both buyers and sellers should engage a qualified conveyancer or property lawyer to review the contract before signing.

Need Help with an REIQ Contract? Contact Us Today

If you are buying or selling a property in Queensland and require assistance with an REIQ Contract, our experienced conveyancing team can help.

We provide:

• Expert contract reviews to ensure compliance
• Guidance on special conditions to protect your interests
• Seamless settlement management

Contact us today for professional conveyancing services and a stress-free property transaction.