In this blog we explain what to do when the tenant / seller does not vacate the property by settlement...

This video/blog is great for - QLD property owners, real estate agents & mortgage brokers who want to know the law around vacant possession at the time of settlement, and how that impacts a Queensland property settlement.

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Hi everybody - George Sourris, Empire Legal.

Today's topic: What to do when a seller or tenant is still in the property at settlement? (QLD).

Picture this - it's settlement day. You're ready to move into your new home. You go to the pre-settlement inspection and the seller or tenant has not yet moved their things out. 

What do you do?

Legally, if there is no tenant noted in the tenancy section of the contract, then vacant possession must be provided at settlement. This means, the people who are occupying the property must be gone along with all of their things. If they are not, it's often a tricky situation to navigate. 

If the contract has standard term clause 6.2, either party can extend settlement of the matter for up to five business days, without penalty or agreement from the other side.

This may allow the seller to delay settlement and buy precious time to ensure the property is vacant.  If clause 6. 2 is not available, then the seller will be in breach of contract and this has serious consequences. If vacant possession is NOT provided, then an essential term of the contract has been breached.

This allows the buyer the ability to terminate the contract and sue for any damages. Furthermore, instead of terminating, the buyer can elect to affirm the contract, which means continue to settlement, but reserve their rights to sue the vendor for damages, specific performance, or both. This is explained in section 9 of the standard terms of the REIQ contracts. 

If a seller, for whatever reason, cannot provide vacant possession at settlement, it is best practice to speak with the real estate agent and solicitors to see if an arrangement suitable to all parties can be made.

For example, the parties may mutually extend without penalties, or the buyer may agree to a further extension on the basis that the seller cover any short term accommodation fees, removal fees, or a cash adjustment is made in their favour at settlement.

Common examples where vacant possession may not be provided: 

1) a seller cannot get a removal truck before settlement and remove their items;
2) a seller has a simultaneous purchase and cannot get access to remove their items before settlement;
3) a tenant does not vacate the property before settlement. 

Often there is a solution that can be found acceptable to all parties by working with the other side and the real estate. Often agents are the glue that holds a property deal together. They know the parties involved in the transaction. All parties have a common goal of achieving settlement - where a buyer gets to buy and a seller gets to sell. 

Always chat with your lawyer as soon as possible for any issues that arise throughout your conveyance. At Empire Legal, we're here to help. Get in touch with us at any time.

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See you next week.

Thanks to our friend Juliana Gomes for this blog suggestion.

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George Souris. Empire Legal.

If you have any questions, you can email me: george@empirelegal.com.au. 

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Thanks for reading everybody. See you on the next one.

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, Gold Coast, 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.