Supreme Court Ruling: Strict Compliance with REIQ Contracts is a Must!

A recent case decided by the Supreme Court of Queensland in February 2025 determined that the terms and conditions of standard REIQ contracts must be strictly complied with both by the buyer and seller. 

Key Takeaways from the Court Ruling:

• Time is of the essence: REIQ contracts require strict adherence to deadlines, especially for deposits.
• Deposit Payment is Critical: Buyers must pay the deposit on time; any delay can lead to severe consequences.
• Agent Authority Limits: A real estate agent cannot change or amend the terms of the contract without written authority from the seller.

The Case Summary:

The Issue: A buyer failed to pay the deposit by the due date, and the real estate agent communicated a delay in payment to the Seller. However, the agent did not have the authority to change the contract terms.

The Decision: The Supreme Court ruled that the deposit payment deadline is an essential term of the contract, and the buyer was obligated to meet this deadline. The seller had the right to terminate the contract and keep the deposit under clause 2.2(5)

Key Clauses in the Contract:

• Clause 2.2(5): "The Seller may recover from the Buyer any part of the deposit which is not paid when required."
• Clause 6.1: "Time is of the essence except for any agreement between the parties regarding the time of day for settlement."

Reminder for Buyers

1. The court was clear, the terms of the contract must be strictly complied with. A few day delay in fulfilling a term, is a breach of the contract.
2. The agent does not have the authority to vary a term. Do not rely on their representations in that regard. While they are often trying to be helpful, a contract is a legal document which must be complied with.
3. Buying a property is a serious matter, it is critical you get professional and accurate advice from an experienced property lawyer.
4. Conveyancing transactions can, and do, go wrong sometimes and you could lose not just the chance to purchase the property, but your deposit (and more).

Disclaimer: This advice is general in nature and is not intended to be legal advice.

If you would like legal advice, please call our office on (07) 5619 0440 and we would be pleased to assist you.