REIQ Contract changes in 2022 for commercial property

  • Blog
  • REIQ Contract changes in 2022 for commercial property
View All Articles

Scroll for more

Our July 2022 article summarised the key changes made to Real Estate Institute of Queensland (REIQ) residential property contracts.

In July of this year, REIQ have released new editions of their commercial contracts to reflect some of the changes made to the residential contracts. We have summarised these key changes below for commercial property contracts.

Settlement extension

Similarly to the new residential property contracts, the amended terms of the contract allow either the Seller or the Buyer to obtain an extension of the original settlement date under the contract of up to 5 business days in circumstances whereby a party is unable to settle for any reason. This can be done by notifying the other party before 4pm on the date of settlement, and you do not need to provide a reason for doing this.

In the previous version of the contract, if you could not settle by 4pm on the original settlement date, you would have to request an extension and the other party would have to agree to it (which they are not obliged to do).

Any extensions longer than 5 business days will still need to be agreed to by the other party.

If you do not wish for the extension to be an option automatically (without your agreement), please get in touch with us and we can discuss the possibility of deleting the clause from your contract. Further, if your contract is signed and you think you may need to extend the settlement date, please advise us, and we can walk you through the process.

Seller Warranties

A new Seller warranty has been added to the contract whereby the Seller warrants that they have not received any communication from a competent authority that may lead to the issuing of an enforcement notice or notice to do work on the property. The reason for adding this is that in practice, local governments correspond with owners for a considerable period without issuing a formal notice. This means that if the Seller has been corresponding with a local authority or similar in relation to a potential issue, it must be disclosed to the Buyer before signing the contract.

Lease Warranties

The contract now contains an extensive list of matters that the Seller warrants are correct in relation to any current lease(s) over the property. For example, the details of the leases, that there is no existing breach, any incentives etc. If any changes to this happen after the Contract date, the seller must notify the buyer of the change.

New Termination Rights

The contracts now provide buyers with a termination right if there:

  1. is an error in the boundaries or area of the property;
  2. is an encroachment by structures onto the property;
  3. is a mistake or omission in describing the property of the Seller’s title to it; OR
  4. are services that pass through the property which do not service the land and are not protected by an encumbrance, such an easement, disclosed to the Buyer in the contract.

Particularly in relation to item 4 above, to ensure there are no services that pass through the land, or to ensure they are disclosed to the Buyer prior to the contract being signed, it is necessary for the Seller or Seller’s agent to complete a ‘Dial Before you Dig’ search.

This is a free search which will show any underground services, such as network cables, water pipes etc. We recommend doing this search and providing it to the buyer prior to the contract being executed so that all services and unregistered encumbrances are disclosed. Failure to do this could provide the buyer with a reason to terminate the contract.

Contract Date

The final key change is a practical one, which has changed the definition of the ‘contract date’ to be the date that the last party signed the contract, in the event that it hasn’t been dated, as sometimes the contract date is forgotten to be inserted once all parties have signed.

Our Property Team is ready to assist if you have any questions and wish to know if the above commercial property changes apply to your contract of sale. We note that not all contracts are REIQ contracts, and some contain special conditions that may vary the standard clauses in the contract. We recommend sending us a copy of your contract to review prior to signing.

The above is not an exhaustive list of the amendments, and other minor changes have been made to the contracts.

Please contact FC Lawyers to assist and review any commercial property contract prior to you signing any documentation.

The information provided in this article is for general information and educative purposes in summary form on legal topics which is current at the time it is published. The content does not constitute legal advice or recommendations and should not be relied upon as such. Whilst every care has been taken in the preparation of this article, FC Lawyers cannot accept responsibility for any errors, including those caused by negligence, in the material. We make no representations, statements or warranties about the accuracy or completeness of the information and you should not rely on it. You are advised to make your own independent inquiries regarding the accuracy of any information provided on this website. FC Lawyers does not guarantee, and accepts no legal responsibility whatsoever arising from or in connection to the accuracy, reliability, currency, correctness or completeness of any material contained in this article. Links to third party websites or articles does not constitute any endorsement or approval of those sites or the owners of those sites. Nothing in this article should be construed as granting any licence or right for you to use that content. You should consult the third party’s terms and conditions of use in relation to any third-party content. FC Lawyers disclaims all responsibility and all liability (including liability for negligence) for all expenses, losses, damages and costs you might incur as a result of the information being inaccurate or incomplete in any way. Appropriate legal advice should always be obtained in actual situations.


Prefer to get in touch?

With offices in Brisbane, Sunshine Coast, North Queensland and Sydney, our team is well equipped to provide both advice and support across a broad range of legal areas.

Free call 1800 640 509
  • This field is for validation purposes and should be left unchanged.