27 March 2020

COVID-19 and Property Transactions

Jacob Duane
Jacob Duane Commercial Property Lawyer

Given that a Level Three lockdown could be mandated sooner rather than later, it is essential to consider your risks under your property contracts.

In Queensland, the standard REIQ contract provides that time is of the essence. That means if you do not observe your obligations by the due date, you will be in breach of your contract.

There are four exceptions under the standard REIQ contract for Delay Events:

(a) a tsunami, flood, cyclone, earthquake, bushfire or other act of nature;
(b) riot, civil commotion, war, invasion or a terrorist act;
(c) an imminent threat of an event in paragraphs (a) or (b); or
(d) compliance with any lawful direction or order by a Government Agency.

If we are forced into lockdown, it is possible that your contract may be impacted by a lawful direction or order made by a Government Agency.

If that is the case, and you are a party that is unable to perform your settlement obligations as a result of a Delay Event, the time for the performance of those obligations is suspended, ceases to be the essence, and the parties are deemed to not be in breach of their settlement obligations.

When the suspension period ends, either party to the contract may issue a notice of settlement. That notice must state that:

(a) that the suspension period has ended;
(b) a date, being not less than 5 nor more than 10 business days after the date the notice to settle is given, which shall become the settlement date; and
(c) that time is of the essence.

You need to speak with your solicitor to see how this impacts on you.

 

 


Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).

>
>
>
>

Stay in the know

Get our latest news and publications delivered straight to your inbox

  • This field is for validation purposes and should be left unchanged.