What Is Time of the Essence in Queensland Real Estate? Definition and Agent Guide

Your client’s buyer has just called — it’s 3:45 pm on settlement day and the bank isn’t ready. Under the standard REIQ contract, time is of the essence: miss that deadline, and the seller may be entitled to terminate and keep the deposit. That single contractual phrase — four words — can cost a buyer tens of thousands of dollars and unravel months of work. Every agent practising in Queensland needs to understand precisely what it means, when it applies, and what the 2022 amendments changed.

Time of the essence is a contractual principle in Queensland property law that makes certain deadlines — particularly the settlement date — fundamental terms of the contract. Failing to meet them on time is not merely a technical breach; it entitles the non-defaulting party to terminate the contract and claim damages, without needing to demonstrate any additional harm. It is one of the starkest features of Queensland conveyancing practice, and one that sets the state apart from most other Australian jurisdictions.

How Time of the Essence Works in Queensland Real Estate

The Clause Itself

Clause 6.1 of the standard REIQ contract for houses and residential land explicitly provides that time is of the essence. This means a party must pay the deposit, satisfy conditions, carry out obligations, and effect settlement when they say they will. It remains a staple of Queensland contract law.

The practical consequence is severe. Queensland’s standard conveyancing contracts state that time is of the essence and that settlement must occur on the settlement date. This means that if a party fails or is late to fulfilling their contractual obligations — even by the span of one hour past 4pm on the specified day — the other party is entitled to terminate the contract. The non-defaulting party does not need to give any grace period, any warning, or any notice to cure. The right to terminate arises the moment the deadline passes with the obligation unfulfilled.

This is fundamentally different to most other Australian states. In most Australian states, the sale contract allows a two-week grace period if either party cannot meet the property settlement deadline. Queensland has historically taken a harder line: the compliant party can, in a single day, terminate the contract, seize the deposit, and pursue the defaulting party for further damages.

The Property Law Act 1974 (Qld) — Background Framework

The Property Law Act 1974 (Qld) contains a provision at section 62 dealing with “stipulations not of the essence of the contract.” This section provides that stipulations in contracts, as to time or otherwise, which under rules of equity are not deemed to be or to have become of the essence of the contract, shall be construed and have effect at law under the rules of equity. In plain terms: at general law, a time stipulation will not automatically be treated as essential unless the contract expressly says so, or the circumstances clearly make it so.

The significance of the REIQ contract clause 6.1 is precisely that it does expressly declare time of the essence. It removes any ambiguity about whether the settlement date is a directory or a mandatory obligation. Once those words appear in the contract, the equitable softening that section 62 of the Act would otherwise permit is displaced — the parties have agreed that deadlines are strict.

This interaction between the standard form contract and the legislative framework is why the clause carries such weight. Agents dealing with bespoke contracts, developers’ contracts, or older REIQ versions should always check whether an equivalent provision is present, because its absence substantially changes the legal position of both parties.

What Deadlines Are Covered

The time of the essence principle in Queensland property contracts extends beyond settlement. As time is of the essence in standard property transactions throughout Queensland, it is a requirement that contractual deadlines be met as they fall due. Settling on the settlement date is perhaps the most stressful deadline, as there may be severe consequences for failing to do so.

But the same principle applies to the deposit payment deadline and, where applicable, the satisfaction of conditions such as finance approval or building and pest inspection results. A party may find themselves in default under a contract because they forgot to transfer the deposit to the agent on the required day, for example, leading to consequences such as that contract being terminated, among other damages sustained by the seller. Agents who treat only the settlement date as a hard deadline and treat deposit due dates loosely are misreading the contract — and potentially exposing their clients to termination rights they did not anticipate.

Why Time of the Essence Matters for Queensland Agents

The Stakes Are Real — and Well-Documented

Queensland has produced some of the most widely-reported cautionary tales in Australian conveyancing. A 2021 case involved a 13-minute delay in settlement. A buyer contracted to purchase a $580,000 house in Brisbane. The Commonwealth Bank was not ready to settle at 4pm as required under the strict terms of the contract, due to a minor oversight in the paperwork. The seller refused to grant an extension and terminated the contract. The buyer lost her $29,000 deposit due to missing the settlement deadline.

In a separate 2021 incident, a Queensland couple arranged to purchase a $900,000 home in Jindalee. The buyers’ bank, Westpac, missed the settlement deadline and was not ready to settle until the day after the settlement date. These cases generated significant public debate about whether the rule was fair — but the lesson for agents is not one of sympathy. The rule is what it is, and clients who are not warned about it before they sign are clients who may hold their agent responsible when it goes wrong.

This is particularly an issue in a rising property market, when sellers can seize the deposit from the terminated contract and immediately find a new buyer. The seller can often sell the property for a higher price in the rising market. The time of the essence clause is therefore not merely a technical procedural rule — in a hot market, it creates a meaningful financial incentive for a seller to look for any opportunity to terminate and re-trade.

The Agent’s Exposure

As the agent, you are not a party to the contract and you do not carry the legal liability of a solicitor. But you are the first professional most buyers and sellers deal with, and in many transactions you remain the primary point of communication. When a settlement is approaching, your client will call you first. If you give incorrect guidance — telling a buyer to sit tight when in fact they need to immediately exercise a contractual extension right — the consequences of that advice can be severe. Your professional obligations under the Property Occupations Act 2014 (Qld) require you to act honestly and in the interests of your client. Being unaware of how this clause operates is not a defence; it is a risk factor.

Understanding time of the essence also matters for how you structure conversations with your clients at the time of signing. Buyers who understand what the clause means are buyers who will chase their financier, confirm PEXA workspace arrangements early, and not leave settlement preparation to the last business day. An agent who takes ten minutes to explain the principle at contract execution often prevents a disaster three weeks later.

How the 2022 REIQ Contract Changes Modified — But Did Not Remove — the Principle

The Five-Business-Day Extension Right

In response to growing concern about what some viewed as an injustice, the Real Estate Institute of Queensland and the Queensland Law Society updated the terms of the REIQ contracts and published new editions. The newest editions implement a variety of changes, both minor and major. Most relevantly, the seller and the buyer now have the right to unilaterally extend settlement, for any reason, by up to five business days after the scheduled settlement date.

This change was directly prompted by the 2021 cases. The REIQ amendment changes the time of the essence clause to allow for circumstances when a buyer is unfairly affected by delays outside their control. The update addresses this issue by granting both parties the right to give notice extending the settlement date for up to five days after the agreed settlement date.

The mechanics of the clause are precise. The practical effect is that either party can give notice to the other as late as 4pm on the settlement date that they wish to extend settlement by up to five business days. Notice of the extension can be given at any point between the contract date and the settlement date. The settlement date can be extended any number of times, as long as the nominated settlement date does not exceed the date that is five business days from the original settlement date.

What Contracts the New Clause Applies To

The REIQ contracts that contain clause 6.2(1) are: the Contract for Houses and Residential Land (17th edition); the Contract for Residential Lots in a Community Titles Scheme (13th edition); the Contract for Commercial Land and Buildings (9th edition); and the Contract for Commercial Lots in a Community Titles Scheme (8th edition). This clause is not contained in previous editions of REIQ contracts.

This point cannot be overstated for practice. It is not compulsory in Queensland to use the most recent version of an REIQ Contract and there may be previous versions in use. An agent managing a transaction on an older contract version — or a non-REIQ contract such as a developer’s contract — cannot assume the five-business-day extension right exists. They must check. Parties to a sale may use an older version of the REIQ contract or a non-REIQ sale contract. In every case, the contract terms dictate the rights and responsibilities of the seller and buyer.

Time Is Still of the Essence

The critical point that agents must communicate clearly is that the 2022 changes softened the edges of the clause — they did not remove it. The new contracts still cite time is of the essence, however they are more lenient to ensure settlements can go ahead as planned, albeit possibly a couple of days later than anticipated.

If you have exercised your rights under Standard Term 6.2 and are still unable to meet the extended settlement date, your only option is to ask the other party for an extension. If this is not granted, you could be in default under the terms of the contract, rendering you liable to have the contract terminated, with the other party being in a position to pursue you for damages. If you are a buyer, you could stand to lose your deposit, and could also be responsible for paying any deficiency in purchase price on resale under Standard Term 9.6 of the contract.

The five-business-day window is a buffer. It is not permission to approach settlement casually.

Adverse Events and the Legislative Direction

The interplay between time of the essence and extraordinary circumstances has also been considered at a legislative level. The proposed replacement for the Property Law Act 1974 builds on existing principles by allowing time to no longer be of the essence because of an “adverse event.” This prevents a party from being forced to complete settlement when a serious disruption occurs in the community, such as a cyclone, fire, flood, storm, public health emergencies, lawful directions given by a government entity, acts of terrorism, war, and explosions.

To rely on the relief, the affected party must inform the other party as soon as reasonably practicable after the adverse event subsides, explaining how it prevented them from completing the settlement, and give a notice to the other party to complete the contract. Agents should be aware this legislative reform process is ongoing. The Property Law Act 1974 is proposed for replacement, and the definition of circumstances that suspend the time of the essence obligation may evolve. Staying current with REIQ guidance and Queensland Law Society updates is part of competent practice.

What Queensland Agents Need to Know About Time of the Essence

Client Communication at the Point of Signing

The moment a contract is executed is the moment to explain — clearly and without minimising — that the dates in this document are binding, and that missing them can end the deal and forfeit the deposit. This is especially important for buyers relying on finance. Banks can and do cause delays; PEXA workspace issues arise; discharge of mortgage transactions take longer than expected. None of these excuses, on their own, prevented a termination before the 2022 amendment, and even now they must be managed within the five-business-day window.

Buyers need to understand that if a party’s bank is not in a position to settle on the relevant date and settlement does not proceed as a result, the party will be in default and will be liable for any potential consequences, even if the party itself was prepared. That is not an intuitive result. Clients assume that if their own conduct is blameless, they are protected. Under a time of the essence clause, they are not. Your job is to make sure they understand this before they are staring at a termination notice.

Practical Settlement-Day Protocol

When acting for a buyer, engage with their solicitor or conveyancer in the days before settlement to confirm PEXA workspace status, discharge of mortgage registration, and incoming mortgagee readiness. Do not wait until settlement day to identify a problem. If you need an extension, consider requesting the other party agree to your request first, without immediately exercising your rights under Standard Term 6.2. That way, if you still were not ready to settle after the first extension, you would still have access to the rights under Standard Term 6.2 if they were needed.

When acting for a seller, your client needs to understand that the extension right is bilateral. The clause is worded in such a way that it gives either party the right to unilaterally extend settlement without needing to provide any context or reason for the extension. Even if a party does not have a bank involved as part of the conveyance, they will still have a right to extend settlement and this right can be exercised for any reason. A seller planning removalists, bridging finance, or a simultaneous purchase needs to factor in that the buyer may extend by up to five business days, and to plan around that contingency rather than against it.

Version Checking Is Non-Negotiable

Every time you bring a contract to exchange, identify which version of the REIQ contract — or which non-REIQ form — is being used. It is important for parties to residential property transactions to understand which version of the REIQ Contract is being used for the transaction. It is not compulsory in Queensland to use the most recent version of an REIQ Contract and there may be previous versions in use. If the contract is an older edition, the five-business-day unilateral extension right under clause 6.2 does not exist. Your client’s only recourse in a settlement delay would be to seek the other party’s agreement — and that agreement may not be forthcoming.

This matters even more in off-the-plan and developer contract contexts. Developer contracts are typically drafted on the developer’s terms and may include highly specific time of the essence provisions, sunset clauses, and termination mechanisms that differ substantially from the standard REIQ form. Alerting your buyers to seek independent legal advice before signing developer contracts is not a legal formality — it is sound professional conduct.

What This Means for Queensland Agents

Time of the essence in Queensland property definition is not an abstract legal concept — it is an active risk in every transaction you manage. The settlement date and the deposit payment deadline are not aspirational targets; they are hard contractual obligations whose breach can unwind the deal entirely.

The 2022 REIQ contract amendments introduced a five-business-day unilateral extension right that has meaningfully reduced the sharpest edge of the clause — but only for contracts executed on the 17th edition (residential) or equivalent current commercial editions. Agents working with older contracts, developer contracts, or non-REIQ forms cannot assume that protection exists.

Your practical obligations are clear: explain the clause to clients at signing, monitor settlement preparation actively in the lead-up to the date, know which version of the contract governs the transaction, and understand both parties’ extension rights before a problem arises rather than after. A buyer who loses a $29,000 deposit over a 13-minute banking delay did not benefit from an agent who assumed everything would be fine. The discipline is in the preparation, and preparation begins with knowing exactly what the contract says.