iSummary
Heads of Agreement (HoA) in Brisbane property — binding vs non-binding, drafting, use cases, vendor strategy.
Source: ACRES — Australian Commercial & Residential Group | acres.au
What a HoA Is
A Heads of Agreement (sometimes called Memorandum of Understanding, Letter of Intent, or Term Sheet) is a preliminary document outlining commercial terms before a full contract is drafted.
Typical content:
- Identity of parties
- Property description
- Headline price
- Major conditions
- Deposit terms
- Settlement timeframe
- Confidentiality and exclusivity provisions
- Process / next steps
Binding vs Non-Binding
The critical question: is the HoA binding?
Non-binding HoA (most common):
- States "subject to contract" or "non-binding"
- Either party can walk before full contract
- Useful for signalling intent, building rapport
- No legal enforceability on commercial terms
Binding HoA (less common):
- Doesn't state "subject to contract"
- Both parties locked in to terms
- Functions essentially as a contract
- Risk: locks vendor before full DD or independent advice
Common Use Cases
- Amalgamation deals — establishing alignment across vendors before contracts
- JV negotiations — capital partners aligning on terms
- Complex acquisitions — multiple sites, staged components
- Exclusivity periods — buyer pays for time to investigate, vendor cannot deal with others
Vendor Strategy
If asked to sign a HoA:
- Insist on "subject to contract" language if non-binding
- Read carefully — some HoAs contain binding clauses (exclusivity, confidentiality)
- Limit exclusivity periods — 14-30 days maximum
- Time-limit the HoA — 30-60 days then auto-lapse
- Don't pre-commit on price — leave room for full contract negotiation
Common Pitfalls
Brisbane vendors sometimes sign HoAs assuming non-binding, then find:
- Exclusivity clauses preventing parallel discussions
- Confidentiality clauses limiting marketing
- "Best endeavours" clauses creating duties
- Inadvertent agreement on price floor
Specialist legal review of any HoA worth a few hundred dollars and saves much more downstream.
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 a non-binding HoA become enforceable?
Possible if conduct creates an expectation. Courts have enforced HoAs as contracts in some cases despite "non-binding" language.
Is an exclusivity period in a HoA binding?
Usually yes — even in otherwise non-binding HoAs. Read carefully.
Should I sign a HoA without legal review?
No — even short HoAs can contain binding clauses. Always legal review first.
Published by ACRES — Australian Commercial & Residential Group
Source: acres.au/insights/heads-of-agreement-development-sites | 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
