Doesn’t a handshake mean anything any more? It’s a lamentation I have heard a lot over the years as buyers and sellers (typically of older generations) are faced with ever growing pages of paperwork (or at least digital pages) when it comes to doing a deal.
A verbal or handshake agreement might stand us in good stead in a lot of areas in life, but when it comes to property (and enforcement) its written, or bust. Dusting off the old Property Law Act 1974 (a copy of which my wife kindly had hidden away) “No action may be brought upon any contract for the sale or other disposition of land or any interest in land unless the contract upon which such action is brought, or some memorandum or note of the contract, is in writing, and signed by the party to be charged, or by some person by the party lawfully authorised”. Put simply, if its not in writing, and signed, then it doesn’t count.
For true enforceability, and to cover off the many various conditions which might apply to a property agreement, be it tenancy or sale, we use standardised forms as contracts – prepared by lawyers in their base form and designed to provide a level of protection to each party. The parties are clearly spelled out, we know the consideration (the price or rent), the time everyone agrees to allow and any other special conditions required. Changes have to be agreed to by each party, its in clear language and you know definitively when the deal is done.
In QLD, putting a contract in place has the added benefit of protecting your right to purchase the property and not have someone else come in later with more money or an otherwise more attractive offer, as long as the contract remains afoot and you’ve done everything you’re supposed to. That’s not always the case in other jurisdictions and its something we should be pretty thankful to have.
Just because its not on the standard form, does not mean that you’re not bound to an agreement though – there was a pretty controversial case in commercial property going back a little while where it was established a chain of emails (between appropriately authorised parties) can be enough to be considered binding. The test hasn’t made the jump to residential yet, but time will tell.
So while no, a handshake is no longer the guarantee it might have been considered to be. But for those that stand by it despite temptation not to – well, that’s a hand worth shaking.