With fear mongering and “what-ifs” circulating at the moment about conveyancing for property sales, we would like to provide some clarity and peace of mind.
Some important initial points:
- In the last few weeks we have been preparing for our staff to work remotely from home if/when that is required. If it is decided that we must close our premises we will still be open for business, with our phones and emails re-directed and our usual hours.
- Banking, financial services and postal/courier deliveries are all “essential services” and will be amongst the highest priorities to be maintained in this COVID-19 affected economy.
- Property transactions will remain as a critical function in our economy and the banks will be committed to ensuring they have the infrastructure in place for settlements to continue. Simply put, the infrastructure that we require to complete settlements will not suddenly disappear.
- All of the latest versions of the standard form contracts have been amended to include provisions for the suspension of time for delays caused as a result of government directions or orders, as well as acts of nature. The effect of these conditions is that where a party cannot fulfil a settlement obligation due solely to the impact of the disaster/event, then settlement is delayed by the time of that delay.
- The latest versions of the REIQ residential contracts and the ADL contract clauses in our view do not require amendment to accommodate for COVID-19.
- Older versions of contracts (e.g. the 15th edition of the REIQ contract for Houses and Land) should have a minor edit made to include COVID-19 within the “Natural Disaster” definition for complete certainty. If essential services have to shut down due to COVID-19 then it is likely that there will be some form of government declaration that COVID-19 is a “natural disaster”.
- All of the standard form contracts provide for electronic conveyancing (generally known as PEXA). This has not been widely taken up in Queensland due to cost and some anomalies. We are a registered PEXA user and have undertaken PEXA settlements so we can do settlement this way if required.
- PEXA is no different from “traditional” conveyancing in that the lawyers acting for the Seller MUST establish the Seller’s identity. The current advice is that best practice still recommends this is done face to face. We think this is likely to be updated in time, but have systems in place in the meantime to enable us to process all sales and purchases.
Four key takeaways:
- The infrastructure we need to complete a sale or a purchase will not disappear. Property sales can and will continue in the COVID-19 world we now live in.
- Use the latest versions of the REIQ or ADL contracts:
- 16th Edition REIQ Contract for Houses and Residential Land
- 12th Edition REIQ Contract for Residential Lots in in a CTS
- 9.5.8 ADL Contract for House and Land.
- If for some reason you need to use an outdated version, you should include a special condition to make sure COVID-19 is treated as a “natural disaster“ for suspension of time conditions in the standard contracts.
- We will be open for business, servicing our clients’ needs, even if it means we need to temporarily close the office.
For queries relating to residential contracts please contact Justin Shine and Melinda Stead of Smart Move Conveyancing on (07) 4616 9888. For queries relating to commercial or rural contracts, please contact Tony Randall and Wendy Gordon on (07) 4616 9898.