DANGEROUS LOOP HOLE FOR PURCHASERS IN THE STANDARD REIQ (Real Estate Institute of Queensland) CONTRACT
This article comes from the Commercial law team at Hatzis Lawyers Brisbane
Clause 7.6 of the Standard Conditions of the Standard REIQ Contract states "
Any valid notice or order by any competent authority or court requiring work to be done or money spent in relation to the property must be fully complied with:
- If issued before the Contract date, by the seller before the settlement date;
- If issued on or after the Contract date, by the buyer;"
The effect of such a clause is that a potential buyer could be up for many thousands of dollars in additional works not budgeted for nor even contemplated.
An example of such a notice related to a boarding house where a notice was issued subsequent to the Contract being entered into. It was obviously the case that an inspection had taken place before the contract was entered into but the buyer was not aware of this.
Accordingly the works that the Council required would have meant expenditure of no less than $5,000.00 and possibly as high as $10,000.00.
If the purchaser had allowed his solicitors to review the Contract that clause could have been amended and the purchaser would not have been up for the additional costs.
Contact our Brisbane Commercial law team on (07) 3345 4388 or e-mail michelle@hatzislawyers.com.au for further information.
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