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Hi everybody - George Sourris, Empire Legal.
Today's topic: Deed of Rescission QLD - explained!
What the heck is a Deed of Rescission? Why do I need one? I don't want one. What do they cost? I don't understand why we need it. These are all common phrases that we hear surrounding deeds of rescission in Queensland. Let's dive in.
What is a Deed of Rescission?
A deed of rescission is a legal document, a deed, that allows the parties to a property purchase, the ability to mutually rescind the contract and sets out the terms of the agreement.
Rescinding a contract means: a formal agreement that revokes the original contract between the parties.
Why do I need a Deed of Rescission?
The reason a deed of rescission is usually requested is because the buyer needs to change the purchasing entity on the contract. This is a common one that we see all the time. Say you buy in your personal name and before settlement you realise the property you are buying needs to actually be bought in a company name.
You can't simply change this on the contract, as this constitutes a material change. It would be a different story if there was just a typo or maybe a middle name missing. That's fine to agree between solicitors in an email. However, when it comes to adding or removing a party on the contract, you need a whole new contract to be entered into, as the parties differ from the original signed agreement.
The other main reason is to avoid double transfer duty.
The deed formally rescinds the original contract, effectively meaning it never existed. This protects the buyer from the risk of paying double duty, as long as there is no resale agreement between the parties. Often, the deed will set out certain terms, such as: the deposit paid under the original contract is to be transferred to the new contract, and the cooling-off period is to be waived for the new contract.
Why can't I terminate a contract instead of entering into a Deed of Rescission?
If you're the purchaser and your contract is not yet unconditional, you can elect to terminate, if you have valid grounds. For example, maybe under finance, or building and pest. The main reason you would enter into a deed of rescission instead of terminating a contract is: #1 - because the contract is unconditional and you have no grounds to validly terminate; or, #2 - for certainty that the parties will enter into a new contract.
If a matter is terminated, there is likely to be a gap between when the termination takes place and a new contract is signed, and there is no guarantee that the parties will sign a new contract. When a deed of rescission is entered into, the terms usually oblige the new contract to be entered into at the same time. One contract replaces the other simultaneously.
What does a Deed of Rescission cost in Queensland?
Well, this ranges from law firm to law firm. However, a rough range is between $300-$800 depending on the complexity of the situation in the document.
Why does a Deed of Rescission cost money?
Put simply, it's legal work drafted by a lawyer, and the terms also need to be explained and discussed with the client and negotiated between the solicitors.
Lawyers, as a professional service, charge for their time and expertise. The good news is, at Empire Legal, we operate most of our services in our property sector on a fixed cost basis.
This structure allows clients peace of mind, with transparency on exactly what the bill will be. Our experienced team deal with thousands of property conveyances across Queensland every year. If you're buying or selling a property, a real estate agent, mortgage broker, banker, or other professional service with clients that need help with conveyancing - we want to work with you!
Guys, listen up. This area of property law is complex and you should seek professional legal advice in relation to deeds of rescission. Don't just YOLO. Get the advice. It could cost you your deal. Well, that's it for this week.
Thanks - see you next week!
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George Sourris. Empire Legal.
If you have any questions, you can email me: george@empirelegal.com.au.
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Ladies and gentlemen, please keep in mind that all advice is general in nature and does not constitute legal advice. This is authorised by George Sourris, Empire Legal, Brisbane, Queensland, Australia.
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Note: all information is general in nature and as each matter is unique please contact our office for tailored advices: the above does not constitute legal advice.