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Searches on residential property – why are they important to buyers?

If you are buying a residential property in Queensland, conducting searches is an essential step to ensure you are well informed as to the condition of the property.

Seller’s disclosure obligations

The seller has statutory obligations to disclose certain information and notices about the property. For example, the seller must give the buyer a copy of any order made by the Queensland Civil Administrative Tribunal in relation to trees.

Under the standard form REIQ contract in the Queensland, the seller also provides some contractual warranties about various things which could affect the property. For example, the seller warrants that it is not aware of any circumstances that may lead to the land being classified as contaminated.

Why conduct searches?

So, if the seller has obligations to disclose and warrant certain things about the property, why spend the money on searches?

Firstly, because the seller’s disclosure obligations and warranties are limited. For example, there is no obligation on the Seller to tell you about any property defects or flood levels.

Secondly, searches are the only way to check whether the seller’s disclosures and warranties are correct.

The money you spend on searches could save you a lot more down the track if any identified issues aren’t rectified or addressed.

What if you receive adverse search results?

Certain circumstances revealed in searches may give the buyer a right terminate the contract or receive compensation. There are specific notice periods for different adverse results, so it is important that buyers:

1. Instruct their lawyer on which searches they would like to undertake as soon as possible; and

2. Contact their lawyer if they have any concerns about the property or any information they have received.

Not all adverse discoveries give the buyer a right to terminate the contract or receive compensation. For example, the discovery of an unimproved structure may not give rise to a termination or compensation right. Despite this, these searches are useful so that buyers are well informed as to the condition of the property and can plan any necessary action.

If you are purchasing a residential property in Queensland and have any questions about searches or information about the property received from the seller or the seller’s agent, please contact your lawyer for advice.

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Anthony Doolin
Director, Smithfield Property Group