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Understanding the REIQ Contract of Sale

The standard Queensland contract is straightforward once you know what to look for. Here's what every buyer and seller should understand before signing.

The Contract for Houses and Residential Land, commonly called the REIQ contract, is the standard form used for most residential property sales in Queensland. It is produced jointly by the Real Estate Institute of Queensland and the Queensland Law Society, and is designed to be used by both represented and unrepresented parties. The document runs to roughly 20 pages of standard conditions plus whatever special conditions are added for the specific transaction. Understanding its key provisions before you sign, whether you are buying or selling, reduces the risk of disputes and ensures you know exactly what you are committing to.

Many buyers and sellers skim the contract, rely on verbal explanations from the agent, and sign without genuinely reading what they have agreed to. This creates problems that surface at the worst possible time, usually close to settlement or after it. Taking an hour to understand the key clauses, and having a solicitor review the full document, is time well spent.

The key sections to understand

The front page of the contract records the essential details of the transaction: the full legal names of the parties, the property address and lot on plan description, the purchase price, the deposit amount and the date it is due, and the settlement date. It also records any special conditions, which are additional terms agreed between the parties that modify or add to the standard form. Read the front page carefully. Errors here, wrong names, wrong price, wrong dates, wrong lot description, can cause delays at settlement and in some cases require the contract to be redrawn entirely. Check every field before you sign.

The inclusions and exclusions section specifies what is and is not included in the sale. In Queensland, fixtures are generally included unless they are specifically excluded, while chattels (freestanding, removable items) are not included unless they are specifically listed. Light fittings, built-in wardrobes, fixed air conditioning units, and window furnishings that are fixed to the wall are typically fixtures. Freestanding appliances, freestanding furniture, and garden ornaments typically are not. The interpretation of individual items, such as a freestanding outdoor kitchen or a garden shed on a concrete slab, can be genuinely ambiguous. If you want something included, whether you are the buyer or the seller, have it written into the contract explicitly and clearly. Assumptions are the source of a significant number of pre-settlement disputes.

Conditions and how they work

A finance condition gives the buyer a specified number of days (commonly 14 to 21 days from the contract date) to obtain formal approval from their lender. If the buyer obtains approval, the condition is satisfied and the contract becomes unconditional. If the lender declines, the buyer can terminate the contract by giving written notice within the specified timeframe and recover their deposit in full. If the buyer fails to give notice within the timeframe, the condition lapses and the contract becomes unconditional by default, meaning the buyer is bound whether or not they have finance. Managing the finance condition timeframe is a critical part of the buyer's solicitor's job.

A building and pest condition operates on the same principle. The buyer has an agreed number of days to conduct an inspection and notify the seller if the results are unsatisfactory. If the report reveals something the buyer considers unacceptable, they can terminate within the timeframe. If they allow the timeframe to pass without action, the condition is satisfied by default. Written notice is always required to exercise a condition. Verbal communication, a phone call to the agent, a text message, does not constitute valid notice under the contract. Your solicitor sends formal written notice, and the timing is strictly observed.

The statutory cooling-off period

For private treaty sales (meaning not auction), residential buyers in Queensland have a statutory five-business-day cooling-off period. This period begins when the buyer receives a copy of the fully signed contract. During this period, the buyer can withdraw from the contract for any reason. However, exercising the cooling-off right is not cost-free. The buyer forfeits 0.25% of the purchase price as a termination penalty, which is paid to the seller. On a $1.2 million property, that is $3,000. The cooling-off period exists as a safety net, not as a substitute for proper due diligence before signing. Use it if you need it, but do not rely on it as your primary exit.

The deposit

The deposit in Queensland is typically 10% of the purchase price, though a lower deposit can be negotiated and is sometimes agreed to, particularly for buyers who are bridging between a purchase and a sale. The deposit is held in the real estate agency's trust account until settlement. It does not go to the seller when it is paid. The seller has no access to it until settlement completes and the transaction is formally concluded.

If the contract is terminated under a valid condition, the deposit is returned to the buyer in full. If the buyer defaults without a valid contractual reason, the seller can claim the deposit. If the seller's loss from having to resell at a lower price exceeds the deposit amount, the seller may also pursue the buyer for the difference. The deposit is meaningful security for both parties and should be treated as such.

Special conditions and what to watch for

Special conditions are added by negotiation and can cover a wide range of scenarios: an extended settlement period, an early possession date, a requirement for the seller to complete specified works before settlement, a subject-to-sale condition allowing the buyer time to sell their existing property, or an FIRB approval condition for foreign purchasers. Every special condition needs to be drafted clearly, with unambiguous timeframes and consequences. Vague special conditions are a source of disputes. If a special condition is important to you, have your solicitor draft it or at minimum review the drafting before you sign.

Always have a solicitor review the contract

The REIQ contract is a standard form, but every property transaction has features that require professional attention. Easements on the title, outstanding rates or water levies, body corporate disclosure documents for units and townhouses, contaminated land registers, and any special conditions added by either party all need to be reviewed by someone with the training to identify what matters. A solicitor or conveyancer reviews the contract alongside a title search and any relevant disclosure documents, flags anything that requires attention, and advises you on your position before you are legally bound.

The cost of legal advice before signing, typically $150 to $300 for a contract review, is a fraction of the cost of resolving a dispute after you are bound. In Brisbane's inner-east market, where properties regularly sell for $900,000 to $2 million or more, this is not a place to cut corners.