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Seller warranties – what are they worth to a buyer?

The standard REIQ contract in QLD includes various “seller warranties”. These are statements made by a seller to a buyer about a property. If these statements are wrong the buyer may be entitled to terminate the contract or claim against the seller for breach.

What is being warranted?

Standard seller warranties in the REIQ contract have the seller confirming things like ownership of the property, capacity to settle the contract and the absence of unsatisfied judgments, orders or writs affecting the property. For a residential contract it’s not normally required, but in some cases a buyer may want to introduce special conditions (in the form of additional warranties) to deal with particular risk issues associated with a property (i.e. council approvals for improvements).

On the other hand, some sellers may want to strip back the standard seller warranties where the sale is truly ‘as is, where is’. We can assist with special conditions if the particular deal requires it.

Breach of warranty – what next

The breach of seller warranties triggers specific rights under the standard REIQ contract. There may also be additional rights available to a buyer outside of the contract itself – for instance if a statutory obligation is also breached.

A buyer’s rights will depend on the warranty being breached as different remedies apply to different warranties. At one end of the scale the buyer will only be entitled to terminate the contract and walk away with his deposit (for example where an order had been made affecting the property, contrary to the seller’s warranty). At the other end of the scale the buyer may be entitled to sue the seller for compensation (for example where the seller is aware the property is contaminated).

For sellers it’s important to ensure the standard warranties are accurate for the property, otherwise they should be amended. For buyers it’s important to test the accuracy of the seller’s warranties (by undertaking searches) and be ready to take any necessary action. Of course, it’s not always about contractual rights and remedies.

There is often a practical solution to avoid disputes and contacts falling over. A good lawyer will explore all options and try to negotiate a positive outcome. 

Give us a call

If you are buying or selling a property in the near future and you want to discuss the issues raised in this article—please don’t hesitate to give any of our lawyers a call.

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“I have worked with Matt and Amity Law for several years. Matt is a pragmatic, client focused lawyer who understands our business and achieves the legal outcomes we need in the timeframes our business requires”


Anthony Doolin
Director, Smithfield Property Group