QLD finance date = bank approval right?

[jerrybee]

Ok this might seem like a silly question but I'm getting so anxious about a deal I'm working on I'm just making sure I have everything perfect

Does the finance date mean I have to get bank approval by this date, OR does it mean I have to get bank approval AND sign off on all the mortgage documents by this date? The latter is not possible as the other signatories are overseas on holidays until after the finance date.

I assume it's the former, not the latter, right? Because correct me if I'm wrong but the finance date doesn't actually mean anything other than "are you able to go unconditional?" by X date. As far as the seller knows, I may not have even contacted the bank yet, as long as I'm willing to go unconditional by that date (which isn't the case, but just to highlight an extreme scenario)

Right now I have full unconditional approval and don't intend on doing anything else until they get back from holidays, which is after the finance date, but before settlement. I'm just crazy paranoid that I might have missed something

 

[Terry_w]

If means you have entered a contract, but have the right to terminate if you do not have finance approved by the date of the finance clause.

Just check the wording because it can vary.

 

[RPI]

You are correct. If it is one of the 2 standard form contracts it is not a deeming clause. This basically means that you can terminate based on the finance clause up until 5pm on the day. After 5pm you have an ongoing right to terminate, but the seller can also terminate.

 

[jerrybee]

After 5pm you have an ongoing right to terminate, but the seller can also terminate.

Don't you mean the other way around? After 5pm I'm either out (for failure to obtain finance) or we're both locked in.

 

[Peter_Tersteeg]

You've got unconditional approval by the finance date, that's enough.

The finance clause gives you a way out of the contract. You don't have to get finance by the end of the finance clause period, but if you don't have finance by that time and your finance clause time frame is not extend, the finance is assumed to be unconditional.

 

[RPI]

You've got unconditional approval by the finance date, that's enough.

The finance clause gives you a way out of the contract. You don't have to get finance by the end of the finance clause period, but if you don't have finance by that time and your finance clause time frame is not extend, the finance is assumed to be unconditional.

Not in QLD. As I said before it is not a deeming clause, it is not deemed satisfied.

REIQ Contract conditions

3.2 The Buyer must give notice to the Seller that:
(1) approval has not been obtained by the Finance Date and the Buyer terminates this contract; or
(2) the finance condition has been either satisfied or waived by the Buyer.
3.3 The Seller may terminate this contract by notice to the Buyer if notice is not given under clause 3.2 by 5pm on the Finance Date. This is the Seller?s only remedy for the Buyer?s failure to give notice.
3.4 The Seller?s right under clause 3.3 is subject to the Buyer?s continuing right to give written notice to the Seller of satisfaction, termination or waiver pursuant to clause 3.2.

 

[RPI]

ADL forms Contract (2nd most popular contract in QLD) has similar terms at clause 5. Don't have the word version to cut and post though.

 

[jerrybee]

So let me summarise.

If I have obtained unconditional approval for the loan by this date, I don't actually need to have signed the documents by this date, I only need to be prepared to go unconditional on the contract.

However, unlike other states, in QLD I need to actually tell the seller. I can't just let the date go by and assume they will assume everything is ok because I haven't said anything.

Does that about do it?

 

[RPI]

Don't you mean the other way around? After 5pm I'm either out (for failure to obtain finance) or we're both locked in.

Not in QLD. It is same for B&P. Both conditions are non deeming, that is if you do not provide notice to the seller then they are not deemed to have been waived or satisfied. Prior to 5pm on the day of the condition the seller can not use those terms to terminate the contract, after 5pm they can but only if they beat you 2 it.

SO

If finance was due at 5pm on February 14 and you as the buyer do not give notice to the seller, the contract remains conditional on you being satisfied with finance pursuant to the other relevant terms. If you give notice to the seller 10 days later that you are satisfied, the seller loses the right to terminate the contract. BUT, if the seller sends a notice terminating the contract pursuant to the finance condition after 5pm on February 14 BUT prior to you giving notice of satisfaction, then they have validly terminated the contract and you get your deposit back. They must beat you though. This is why we still use faxes because we get reception confirmation from the receiving fax machine with time and date. It is also why we always request a 24hour extension prior to 5pm on the day if we can't get instructions from you in relation to the condition, we don't want to grant the seller grounds for termination.

 

[jerrybee]

Makes sense. So you can actually break the finance date without approval from the seller and still maintain the contract, as long as you get financing before they have a chance to break the contract themselves. Wow, never knew that. As a buyer I hope I'm never in such a desperate bind to need to take advantage of it. Must be nerve wracking!

 

[RPI]

So let me summarise.

If I have obtained unconditional approval for the loan by this date, I don't actually need to have signed the documents by this date, I only need to be prepared to go unconditional on the contract.

However, unlike other states, in QLD I need to actually tell the seller. I can't just let the date go by and assume they will assume everything is ok because I haven't said anything.

Does that about do it?

Correct.

You don't even need to have approval, you just have to give notice that you have waived the condition. Or you could ask for an extension.

You also don't need to be reasonable in accepting the offer of finance made by the lender, you do need to make a reasonable attempt to obtain for finance.

Even if you have gone with one of the chop shop conveyancing firms up here I am still happy for you to give me a call at the office on Monday for a chat and I will explain it and answer any questions you have free, no obligation etc etc etc.

 

[jerrybee]

I already have one but not happy with them. You can bet that you'll be first on my list for the next property that I buy! You really know your stuff.

Thanks I really appreciate that. Always so interesting to learn about these little subtleties of the law.

 

[RPI]

Makes sense. So you can actually break the finance date without approval from the seller and still maintain the contract, as long as you get financing before they have a chance to break the contract themselves. Wow, never knew that. As a buyer I hope I'm never in such a desperate bind to need to take advantage of it. Must be nerve wracking!

Correct. Again, no need to actually get finance or show any proof of it to tell the other side you waive it. You can always just ask for an extension anyway, (although if you went with a chop shop they will hit you an extra $100 or so to ask for the extension) and unless they have a cash buyer at a higher price most of the time they accept it, or at worst don't say no for a day or so and it buys you some extra time.

Conditions can take up a lot of time and be very stressful for clients, they can lose an opportunity in these non deeming clauses (or go unconditional in deeming ones like Due Diligence). All our lawyers meet every morning and run through every condition that is due that day, what the clients are saying about it, any overdue ones that we are waiting on etc etc. It is amazing the amount of firms out there who don't respond to an extension request for several days.

 

[RPI]

I already have one but not happy with them. You can bet that you'll be first on my list for the next property that I buy! You really know your stuff.

Thanks I really appreciate that. Always so interesting to learn about these little subtleties of the law.

All good. I am always happy to chat property so feel free to call or ask away.
D

 

[jerrybee]

Definitely, will be glad to have someone to reach out to. If only you were handling this one. The company I'm dealing with now replies to my emails 48 hours later if I'm lucky, and seem like a production line and I'm just another case to get to when they have the time. My brother is going to buy a house in the next 8-12 weeks. I'll be sending him your way for sure

 

[jerrybee]

Also one more question. The seller is self acting, no lawyer. The agent seems to deal with 99% of her matters as they are best friends or so they tell me. Would it be legally binding for them if we sent the confirmation fax to the agent? Or does it need to be either the seller or a sellers lawyer?

The whole arrangement between them is just so weird. Best friends and all...

 

[RPI]

Also one more question. The seller is self acting, no lawyer. The agent seems to deal with 99% of her matters as they are best friends or so they tell me. Would it be legally binding for them if we sent the confirmation fax to the agent? Or does it need to be either the seller or a sellers lawyer?

The whole arrangement between them is just so weird. Best friends and all...

Depends on contract. if they listed agent's fax as theirs or they instructed in writing that notice to agent is notice to them etc then ok

 

[jerrybee]

I just checked the contract, the whole lawyer part is completely empty. The part about "Solicitor / Self Acting" is also empty!

My worry is that if I can't go through her agent, then what if the seller doesn't even have a fax, which many don't these days. Have you dealt with something like this in the past? How would you get a receipt confirmation without an old fashioned fax?

 

[RPI]

I just checked the contract, the whole lawyer part is completely empty. The part about "Solicitor / Self Acting" is also empty!

My worry is that if I can't go through her agent, then what if the seller doesn't even have a fax, which many don't these days. Have you dealt with something like this in the past? How would you get a receipt confirmation without an old fashioned fax?

You need to post the notices to their address. Slow and painful. Don't need a receipt though just need to send it 2 days before due date

 

[jerrybee]

You need to post the notices to their address. Slow and painful. Don't need a receipt though just need to send it 2 days before due date

Oh I see, I guess you could register it so you have proof it was sent to a certain address. Makes sense.