THE FIRST 6 MONTHS OF THE NEW CONTRACT
The new edition (17th edition) of the Contract for Houses and Residential, and Contract for Residential Lots in a Community Title Scheme (13th edition) came into effect as of the 20 January 2022.
Just to remind you, here were some of the changes: -
Grace period for settlement date - Buyers and sellers may obtain a 5-business day extension for settlement date if they are unable to settle on the due date. This change to the contract will alleviate pressure on buyers and sellers to complete settlement by the due date in situations that are outside of their control.
Pool safety compliance certificates – The seller is required to hand over a pool compliance certificate for a non-shared pool on or before settlement date. The only exception to this obligation is if a notice of no pool safety certificate is given to the buyer prior to the contract. In case of a property in a CTS, a seller is not contractually obligated to hand over a copy of the pool compliance certificate for a shared pool.
Grace period for payment of deposits – When a buyer pays the deposit due under the contract using direct debit, it is taken to have been paid on the day the buyer instructs their financial institution to pay the funds from their account. It no longer matters when the payment is received by the deposit holder. The deposit is deemed paid when the electronic transaction is completed, and evidence of payment is provided. However, if the money is not received by the due date in the contract, the seller may give a notice to the buyer requiring payment within 2 business days. If payment is not received by the deposit holder in the 2 business days stated in the notice, the buyer will be in breach of the contract.
New smoke alarms – Sellers are required to ensure their property’s smoke alarms are compliant and in line with the new requirements prior to settlement. For further information, see our article ‘Smoke alarms 2022’.
We have found some confusion during our conveyances as to the means in relying on the 5 day grace period. Too often it has been called upon by a request to extend time (like you would for a standard or special condition), rather than a form of notice advising that the Buyer is automatically extending settlement.
It is critical for any Buyer to ensure that when relying on this grace period, it is done as a form of notice extending settlement and not the standard request.
Failure to do so may entitle the Seller to terminate or at least raise an argument to terminate, disrupting Settlement.
Have a chat to the real estate agent looking after the property, visit the REIQ website or contact Creevey Russell Lawyers if you would like further assistance.