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Tuesday, December 5, 2023

New Year New… REIQ Contracts? Is time no longer of the essence?

We are powering through 2022! Amongst the new year’s resolutions that you may or may not have adhered to since January 1st (hey, no judgements here,) the real estate industry has undergone a makeover of its very own. 

New editions of the REIQ contracts for residential sales (house and land and residential lots in community title schemes) were released on January 20th, so if you’re considering buying or selling property this year, here are some important changes you should know.

1. Time is of the Essence

Arguably, the most significant change is the time is of the essence clause. Previously, buyers and sellers were required to meet their conditions strictly by the due date. The new clause (6.2) responds to ongoing difficulties faced by buyers who have been unable to settle on time due to the inaction or delay of a financier. The new changes will allow buyers and sellers to obtain a short extension (up to 5 days) after settlement if they’re unable to settle.

2. Smoke Alarms

If you’re looking to sell your property in 2022, you must adhere to the new smoke alarm compliances (clause 7.9) prior to settlement. If you fail to do so, the buyer can seek an adjustment on the settlement price.

3. Paying a Deposit by Direct Debit

Buyers can now pay their deposit by direct debit. You will be deemed to have paid the deposit on the day you instruct your bank to pay the funds, and a grace period will be allowed to address the impact of delays in the deposit of money to accounts. You must provide evidence confirming the payment was made. Otherwise, the seller may terminate the Contract.

Other changes include:

  • Seller Warranties
  • Property Notices
  • Pool Safety Certificates
  • Services passing through the land without an easement. 

Some of these changes can expose you to unwanted expenses and/or termination if not addressed before the contract. 

Stay safe friends – see you next time!


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