In Queensland, most property purchases use a standard contract endorsed by the Queensland Law Society and the Real Estate Institute of Queensland. The property industry is familiar with the standard contract, which makes it easier and quicker to review contracts before they are signed.
Unfortunately, we still see problems arising because a buyer has not obtained legal advice before signing up.
At FC Lawyers, we know that buyers and sellers are moving in the same direction, and we don’t stand in the way. However, it is wise for both buyer and seller to get a draft contract reviewed before signing.
Here are just a few things we have seen:
- Body corporate not properly set up, or lack of information – if a buyer goes ahead, it may make it harder for the buyer to sell down the track unless issues are addressed now.
- The house, or an extension of the house, not having a final Council approval.
- A buyer of vacant land in an estate – not doing a soil test where it probably should have been a red flag – post-settlement the buyer discovered there were issues with the soil and the building costs would be greatly increased.
- A buyer not doing a survey where a structure is close to a boundary, and it later emerging that the structure is in fact encroaching onto a neighbouring property.
- For commercial property there is a need to review leases carefully – for example, a buyer will be interested to know of any potential difficult conditions such as a first right of refusal for the tenant to buy the property.
- A buyer entering into a contract in the wrong buyer entity, and having to ask the seller to agree to the contract being cancelled and replaced with a fresh contract.
- A seller entering into a contract inclusive of GST later discovers that the sale is a taxable supply for GST purposes, and the contract doesn’t allow GST to be added to the sale price or for the margin scheme to apply.
- A buyer intending to purchase as 99% to the wife and 1% to the husband as tenants in common, however it was noted as joint tenants on the Form 1 Transfer. The husband later went bankrupt and the wife lost the house to his creditors.
A due diligence condition, or another appropriate condition, can protect a buyer from many of these sorts of issues. Many problems can be avoided by taking legal advice before entering into a contract.
Even if a problem can be predicted, and a seller doesn’t want to change the contract as requested, a buyer may still wish to proceed – but the important thing is that they are now making an informed decision rather than being surprised by an issue emerging.
Our Property and Projects team are happy to help any buyer or seller with pre-contract advice. We can advise quickly and fully on all types of conveyancing or property matters.
Contact our team today to discuss your conveyancing and property needs.