Finance conditions can decide whether a Queensland property contract proceeds or falls over. In Queensland, the Property Law Act 2023 and Form 2 seller disclosure statements set the wider framework, while the current REIQ residential contract sets out the finance clause. If you are buying or selling residential property, you need to understand what subject to finance means and how the finance amount, financier and finance date work together. This guide explains the buyer's duty to take all reasonable steps, the 5pm deadline on the finance date, and the written notice required to satisfy or waive the condition. It also covers what happens if finance is refused or no notice is given, whether the deposit is refunded, and when a contract becomes unconditional. Sellers are not left out: we look at what a seller can and cannot do while the contract remains conditional. We also outline finance clause disputes and note that other states differ. This is general information only, not legal advice.
What Subject to Finance Means in a Queensland Contract
A contract that is subject to finance makes the buyer's obligation to complete conditional on obtaining loan approval for a stated amount, from a stated financier, by a stated date. In the REIQ residential contract of sale this sits in the finance clause, which the buyer relies on to end the contract if finance does not come through.
In substance, the clause requires approval for the Finance Amount from the Financier by the Finance Date, on terms satisfactory to the buyer, and the buyer must take all reasonable steps to obtain it. That wording is widely quoted from earlier versions of the form, so check it against the current REIQ contract you are using.
The clause protects the buyer only where every field is properly completed and the buyer acts inside it. It is not an open ended right to walk away, and failing to act can expose the buyer to a claim for breach.
Finance Amount, Financier and Finance Date: Who Fills In What
The clause works only if three fields are completed: the Finance Amount, the Financier and the Finance Date. Leave any one of them blank and the contract is not subject to finance at all, so the buyer cannot rely on the condition to terminate if the loan is refused.
Those terms are negotiated between buyer and seller before the contract is signed. Finance periods differ from contract to contract, so a period you have seen quoted elsewhere tells you nothing about what your contract says.
Finance is one condition among others. A residential contract can also carry building and pest or other conditions, each with its own requirements and its own date. On a body corporate property, a Form 34 body corporate certificate covers its own separate ground.
For agents and conveyancers, the check before signing is straightforward: confirm the completed amount, financier and date line up with what the buyer's lender has indicated. A mismatch here tends to surface later as a dispute.
The Buyer's Duty to Take All Reasonable Steps
With those three fields settled, the buyer's work under the clause begins. The finance clause requires the buyer to take all reasonable steps to obtain approval, so a buyer who signs and then waits, without chasing the lender or answering its requests, is exposed.
In practice, reasonable steps look like applying to the financier named in the contract, supplying the documents the lender asks for, responding to requests promptly, and following up on the progress of the application.
The consequence of not doing so is illustrated by Hauff v Miller, a Queensland case. The buyer did not apply to the nominated financier, the court found reasonable steps had not been taken, the sellers kept the full deposit from both contracts, and the buyers were liable for damages and costs.
Record keeping follows from that. Keep the application, the lender correspondence and the file notes together, because the buyer may need to prove the steps taken. Familiarity with Queensland property law basics helps here.
Hauff v Miller is illustrative, not a rule for every contract. Check which version of the REIQ form applies to yours and whether the finance clause fields are completed before you rely on the clause.
The Finance Date, the 5pm Deadline and the Notice Required
The date that matters next is the finance date named in the contract. The buyer generally needs to act by 5pm on that date; confirm the exact wording in the current REIQ form.
If approval comes through, the buyer must give the notice the contract requires so the condition is satisfied or waived and the contract can proceed. That notice must be in writing and given as the contract requires. Because the contract requires written notice, a phone call to the agent or a verbal update to the seller will not do.
If more time is needed, request an extension from the seller in writing well before the deadline, not on the day. An extension is an agreement between the parties, not something the buyer can take unilaterally.
The buyer is managing the lender and the contract deadline at the same time, so diarise the finance date at signing rather than at the end of the finance period. Agents managing seller disclosure efficiency across their listings will recognise the same discipline: fixed dates, written records, no assumptions.
If Finance Is Refused, or the Buyer Gives No Notice
The two paths turn on who acts. Where finance is refused, or approved only on terms the buyer cannot accept, commentary indicates the buyer may terminate by written notice and recover the deposit, provided all reasonable steps were taken. That protection belongs to a buyer acting inside the clause, so it pays to understand when a buyer may terminate and to keep the lender correspondence that shows the effort.
No notice by the finance date is a different situation. The condition is not treated as satisfied, and the seller, not the buyer, can elect to terminate.
Watch for deemed satisfaction. Commentary reports that some contracts treat finance as approved if the buyer has not terminated by 5pm on a set day. The buyer may then have to complete and risks the deposit, even though the bank has not approved the loan. The contract wording governs.
Once the finance date passes, the options narrow sharply. Seek advice before the deadline, not after it.
What Happens to the Deposit
Where finance is refused and the buyer terminates inside the clause after taking all reasonable steps, commentary indicates the deposit is recoverable. How that release happens depends on the contract and the parties, and the solicitor or conveyancer on the file runs that process.
The opposite outcome follows a buyer who does not act inside the clause. In Hauff v Miller the sellers kept the full deposit from both contracts, and the buyers were also liable for damages and costs, reasonable steps not having been taken.
A change of mind after the contract is unconditional is different again, and the finance clause no longer governs the deposit.
If the contract treats finance as approved when the buyer does not terminate by the set time, a missed step becomes an obligation to complete, whether or not the bank has approved the loan.
Keep the deposit receipt, the finance correspondence and the termination notice together, because the notice must be supported by evidence of the steps taken. For the seller, a Form 2 seller disclosure statement runs on its own timetable.
When a Contract Becomes Unconditional
The deposit outcome turns on how the finance clause was used, but the practical goal is a contract that has become unconditional. Unconditional in relation to finance means the buyer can no longer end the contract on that ground.
A contract can carry building and pest conditions or others alongside finance, and it is not unconditional until all of them are dealt with.
Satisfying a condition means meeting it, and waiving it means giving it up.
Once unconditional, the buyer must complete as the contract provides, and the right to terminate based on finance is gone.
A contract that is subject to finance also interacts with the cooling-off period, which has its own rules and its own timing. Our guide to cooling-off in Queensland contracts explains when it applies.
The Seller's Side of a Conditional Contract
While a contract is subject to finance, the seller is bound by it and cannot simply accept a better offer. The clearest route out is electing to terminate if the buyer gives no notice by the finance date.
The seller can agree a written extension of the finance date. Buyers should request that extension in writing before the deadline. Whether a seller may keep marketing, hold inspections or accept back-up offers is not set out in the finance clause itself, so the contract wording is the only reliable answer. Agents should confirm what the contract permits with the seller before making promises to other buyers. Where the sale involves leases, options or auctions, seller disclosure for those complex transactions follows its own requirements.
Seller disclosure for a residential sale runs on its own timetable, and SearchX prepares compliant seller disclosure statements under the Property Law Act 2023 and the Form 2 regime.
Finance Clause Disputes, and One Note on Other States
Most finance clause disputes come down to three questions. What did the clause actually say? What notices did the buyer give, and when? And did the buyer take all reasonable steps to obtain approval? The argument is usually about those three things rather than about whether the bank ultimately said yes.
The wording matters because the condition only operates where the three fields are completed.
If a finance clause dispute is live, SearchX Legal can help.
Other Australian states operate different rules on finance conditions, so check the law of the state where the property sits.
Finally, the contract in front of the client governs. If the REIQ form has changed since publication, the current version applies. This is general information about the REIQ residential contract, and it is not legal advice.
Key Takeaways for Buyers and Sellers
Use this checklist before you sign or rely on the clause.
Check the three fields. The finance amount, financier and finance date must all be completed.
Buyers: start with the lender from day one, diarise the finance date at signing, and give the written notice the contract requires before the deadline.
Sellers: if no notice arrives by the finance date, you may elect to terminate. Agree any extension in writing before the deadline.
Deposit: recoverable on a valid termination where reasonable steps were taken; at risk where they were not, or where the contract deems finance approved.
Unconditional: for finance, this state is reached when the condition is satisfied or waived, not when loan approval alone is resolved. Confirm the current REIQ form version and date on the day you rely on it.