What does it take to have an enforceable agreement to buy property?

At the moment – on the Gold and Sunshine Coasts at least – the property market is booming (February 2021). Properties are selling quickly and sometimes sight unseen to interstate buyers. Some agents are having trouble finding stock, some people who have sold with a view to renting and then buying later are having trouble finding places to rent.

So with a rising market comes a few issues for buyers. Sellers might look to terminate contracts for the failure of conditions (such as finance) so that they can sell to someone else for a higher price. Sellers might not proceed with contracts if the buyer is wanting the contract to be conditional on various things. A buyer might be negotiating away only to find out that the property has been sold to someone else.

So what is the minimum needed to have an agreement that can be enforced? well in Queensland, section 59 of the Property Law Act requires contracts to be in writing and signed. The requirement for signing can be overcome in some cases of email communications by the Electronic Transactions (Queensland) Act 2001. As a result it is possible that an exchange of emails which sufficiently identify the terms of the arrangement such as the property, the price, any special conditions, and settlement date, as well as identifying the standard form contract applicable, will be sufficient to bind the seller and buyer, even if the emails express that the arrangement is “subject to contract”.

These matters do turn on their individual facts, but it is worth taking advice if you feel that you have arrived at an agreement and are then told that the seller has shifted their position.

For advice in relation to contracts and commercial matters, please contact Peter Muller, Jessica Murray, and Megan Hanneman at QBM Lawyers.