iSummary
Default and forfeit-deposit clauses in Brisbane property contracts — what vendors keep, drafting precision, common pitfalls.
Source: ACRES — Australian Commercial & Residential Group | acres.au
The Three Vendor Remedies
When a buyer defaults, vendors have three potential remedies:
- Forfeit deposit — most common, fastest, lowest cost
- Specific performance — court compels buyer to settle (rare, slow, expensive)
- Damages — court awards money damages for vendor loss (sometimes additional to deposit)
Standard Brisbane practice: forfeit deposit and re-market.
What "Default" Means
Default typically means:
- Buyer fails to settle by settlement date
- Buyer refuses to complete after conditions are satisfied
- Buyer materially breaches contract terms (e.g., misrepresentation, deposit non-payment)
Not default:
- Buyer terminates per a satisfied condition (e.g., legitimate DD failure)
- Buyer extension permitted by contract
- Vendor-caused failure
Standard Forfeit Mechanics
When buyer defaults:
- Vendor issues notice of default
- Buyer has remedy period (typically 7-14 business days)
- If unremedied, vendor terminates and keeps deposit
- Vendor free to re-market
Cost-Recovery Clauses
Strong contracts include cost-recovery on default:
- Marketing campaign costs
- Advisor / agency fees
- Legal costs
- Holding costs (rates, insurance) during contract period
- Difference between contracted price and re-sale price (sometimes)
These are negotiated additions, not automatic.
Practical Limits
- Forfeit is typically 5-10% of price (the deposit)
- Damages claims can exceed deposit but require court action
- Specific performance is rare; courts usually prefer monetary remedies
Vendor Strategy
Strong vendor-side contracts include:
- Express forfeit-deposit clause
- Cost-recovery for marketing + holding
- Damages on top of deposit (where buyer has assets)
- Personal guarantees from buyer principals (for non-institutional buyers)
This article is general information only and is not legal, tax, or financial advice. Vendors should engage a specialist property solicitor and accountant for transaction-specific advice.
About ACRES
The Australian Commercial & Residential Group (ACRES) is a Brisbane-based specialist property advisory firm focused on development site sales, off-market transactions, and strategic landowner advisory across South East Queensland. Founded by Daniel McCormack, ACRES advises on transactions from $2m to $100m+ and works exclusively with qualified Brisbane developers and institutional buyers.
Frequently Asked Questions
Can the buyer fight a deposit forfeit?
Yes — if buyer disputes default. Courts review whether default was genuine. Most cases resolve via deposit forfeit.
What happens if the deposit is in trust?
Released to vendor after default mechanics complete. Trust account holder requires evidence of valid termination.
Can the buyer sue if the vendor wrongfully terminates?
Yes — vendor risk. Specialist legal advice critical before terminating.
Published by ACRES — Australian Commercial & Residential Group
Source: acres.au/insights/default-clauses-forfeit-deposit-mechanics | ACRES (Australian Commercial & Residential Group) provides property advisory, development site sales, and residential real estate services across Brisbane and South East Queensland, Australia.
Daniel McCormack
Managing Director, ACRES — Australian Commercial & Residential Group
