Moving in before settlement: how early possession works in Queensland

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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A lease is ending three weeks before settlement. A removalist is booked. The house being bought is standing empty. The buyer asks the obvious question: can the keys be handed over early?

In Queensland the answer is that it is possible, the standard contract provides for it, and it changes the legal position of both parties more than the simple handing over of keys suggests. A buyer in the house before settlement is not yet its owner and is not a tenant either. The seller still owns a property they no longer control. This guide explains the three different things people mean by "getting in early", what the contract says about possession before settlement, what each side risks, and how the arrangement is usually put in writing. It describes the general position. Whether early possession suits a particular sale, and on what terms, is a decision to take with the solicitors acting for each side.

Sources: clause 8 of the standard Queensland residential sale contract; Residential Tenancies and Rooming Accommodation Act 2008 (Qld).

Three things that are called getting in early

The phrase covers arrangements with very different consequences. The law firm Attwood Marshall, in a note published on 5 May 2026, separates them into three.

The difference is control. With access, the seller lets someone in and they leave. With possession, the buyer holds the keys and decides who comes and goes. Occupation under a licence sits between the two, and in practice it can slide from one to the other if the paperwork does not say clearly which is intended.

Most requests in an ordinary home sale are for the last of these: the buyer wants to live in the house. That is the case the standard contract addresses.

What the standard contract says

The contract published by the Real Estate Institute of Queensland with the Queensland Law Society does not give the buyer any right to early possession. It sets the rules that apply if the seller chooses to allow it. In the editions of the residential contract published to date, those rules sit in clause 8, beside the clauses on risk and on access.

Four rules do the work.

The buyer holds a licence. Possession before settlement is under a licence that is personal to the buyer and that the seller may revoke at any time. The clause states that it does not create a relationship of landlord and tenant.

The buyer keeps the property as it is. The buyer must maintain the property in substantially its condition at the date of possession, fair wear and tear excepted.

The buyer insures. The buyer must insure the property to the seller's satisfaction.

The buyer indemnifies. The buyer indemnifies the seller against any expense or damages the seller incurs as a result of the buyer's possession.

The clause also preserves the buyer's rights under the contract: taking possession is not, by itself, a waiver of them. That is a narrower protection than it sounds, as the next sections explain, because some rights fall away for other reasons once the buyer is in.

Everything else is left to the parties: how long, whether any money is paid, who pays the rates and the power, what happens if settlement is delayed. Those are matters for a special condition, and it is the special condition, not the standard clause, that decides how well the arrangement works.

What the buyer gives up by moving in

A buyer tends to see early possession as a favour from the seller. It also has costs for the buyer, some of them hidden.

The first is a statutory right. Under section 77 of the Property Law Act 2023, a buyer may rescind a contract for a home that is damaged or destroyed so that it is unfit for occupation, and recover everything paid. The right must be exercised before settlement or before the buyer takes possession, whichever comes first. A buyer who has moved in early has passed that point. If the house burns down the following week, the Act's exit is no longer available, and the buyer is left with the contract, under which the property has been at the buyer's risk since 5pm on the first business day after the contract date.

The second is the practical ability to complain. A buyer living in the house is poorly placed to argue at settlement that it is not in the condition promised. Attwood Marshall notes that the terms commonly recommended for early possession have the buyer accept the property in its present condition and agree not to object, make a claim or delay settlement because of its state. A seller who is well advised will ask for exactly that.

The third is money spent on the house. Painting, new carpet, a kitchen started early: all of it is work on a property the buyer does not own. If the sale does not complete, the improvements stay with the seller. The conveyancing firm Own It Conveyancing puts the advice simply, which is to defer improvements until after settlement.

The fourth is cost. From the day of possession the buyer will usually be asked to carry the outgoings, in addition to the insurance the clause requires.

What the seller risks by saying yes

For the seller the central risk is simple to state. If the sale completes, early possession will have cost nothing. If it does not, the seller owns a house with someone else living in it.

The licence can be revoked, and the standard terms require a buyer to leave if the contract ends. Requiring it and achieving it are different things. Attwood Marshall lists the difficulty of regaining possession if the sale does not proceed as the first risk for a seller, and a buyer who will not go may have to be removed through the courts, during which time the property cannot be relet or resold with vacant possession.

There is a second risk that arises even when the sale is sound. A buyer who is living in the house has every opportunity to find faults in it. The same firm notes that a buyer in early possession may discover defects and seek concessions before settlement. The seller's protection is the special condition under which the buyer accepts the property as it stands.

Then there are the things that can simply go wrong in an occupied house: damage, an injury to a visitor, an unpaid bill. The indemnity in the standard clause covers the seller against expense or damages arising from the buyer's possession, but an indemnity is only as good as the person giving it. Insurance is what stands behind it.

A seller with a mortgage has one more party to consider. The lender's security is the house, and a loan contract can restrict what the borrower does with it. Whether the lender must be told that a buyer is moving in before the loan is paid out depends on the loan terms, and it is worth asking before agreeing.

Insurance during the gap

Two policies are in play, and neither party can assume the other's protects them.

The buyer is required by the clause to insure the property to the seller's satisfaction. In practice that means a building policy, in place before the keys are handed over, with evidence given to the seller. The buyer will also want contents cover, since their belongings are now in the house. The buyer should tell the insurer exactly what the position is: that they are in occupation under a licence before settlement. An insurer that has been told the customer is an owner-occupier and later learns otherwise may take a different view of a claim.

The seller, who still owns the building, should speak to their own insurer before the buyer moves in. A policy written for an owner-occupied or tenanted home may not respond in the same way when the house is occupied by a buyer under a licence, and the seller should know that before something happens, not after. Keeping the seller's policy on foot until settlement is the cautious course, for the reason given above: if the sale fails, the house and the risk come back.

Why rent turns a licence into a tenancy problem

Sellers sometimes propose that the buyer pay rent for the period. It seems fair, and it is where the arrangement most often goes wrong.

Queensland's tenancy law, the Residential Tenancies and Rooming Accommodation Act 2008, applies to agreements under which a person is given a right to occupy residential premises as a residence. The Act makes an exception for an occupation right given under a term of a contract of sale, but only where that term is for 28 days or less. A buyer who lives in the house for longer than that under the sale contract, or under a separate agreement, may be a tenant whether or not the document calls the arrangement a licence.

Once the Act applies, the seller is a lessor and its rules follow: a written agreement in the approved form, a bond lodged with the Residential Tenancies Authority if one is taken, and notice periods before the occupant can be required to leave. Own It Conveyancing describes the consequence from the seller's side. Where no rent is charged and no tenancy arises, the buyer can be asked to leave if they breach the contract. Where rent is charged, an agreement is needed and notice must be given first, which is why, the firm says, most sellers do not charge it.

The parties have other ways to deal with the money. A licence fee for a short period within the exception is one. More common is to leave rent out and adjust the outgoings: the buyer bears the rates, water and electricity from the date of possession, as they would have from settlement.

If settlement does not happen

The cases that test an early possession clause are the ones where the sale fails after the buyer has moved in.

If the buyer defaults, for example because finance falls through after the contract has become unconditional, the seller may terminate, keep the deposit and resell, under the default provisions of the contract. The licence ends with the contract and the buyer must vacate. The seller then has a claim for any loss, and the indemnity covers damage done during the occupation. Recovering the house may still take time.

If the seller defaults, the buyer's ordinary remedies apply, and the buyer is at least already in the property. Being in the house does not make the buyer its owner.

If the contract ends without fault on either side, the buyer leaves, the deposit goes back, and each side bears its own costs of the episode. Anything the buyer spent on the house is not recoverable unless the special condition says otherwise.

Disputes in other states show how the detail matters. Attwood Marshall cites a New South Wales tribunal decision, Amir v Chief Commissioner of State Revenue, in which buyers in occupation under a document called a licence were found to have exclusive possession and were treated as the owners for land tax. That is a New South Wales ruling on New South Wales law, and it is mentioned here only as an illustration: what an arrangement is called does not settle what it is.

How the arrangement is put in writing

Early possession should never rest on a phone call and a set of keys. It is recorded in a special condition to the contract, or in a short deed between the parties, drafted or checked by the solicitors.

It is also usual to deal with the outgoings, to record the condition of the property on the day with dated photographs, and to state that the contract is unconditional before possession is given. That last point is the single most effective protection for a seller. A buyer whose contract is still subject to finance or to a building and pest report can still end it lawfully. Giving that buyer the keys means accepting that they may hand them back.

Alternatives that carry less risk

Because early possession changes so much, it is worth asking whether something smaller would solve the problem.

If the buyer needs measurements, quotes or a tradesperson's opinion, access is enough. The standard contract already allows the buyer and their consultants to enter, after reasonable notice, for a short list of purposes, including one inspection before settlement and one visit to value the property. Extra visits can be agreed informally and supervised by the agent.

If the buyer needs somewhere to put furniture, the parties can agree to storage in a garage without anyone living in the house. That is a narrower licence, with the risk to the goods on the buyer.

If the buyer needs to live somewhere, the cleanest answer is often to bring settlement forward. Where both sides are ready and the buyer's lender can fund early, an earlier settlement date gives the buyer the house as its owner, with none of the complications of a licence.

And if the timing problem is the seller's, the mirror image is available: the sale settles on time and the seller stays on for a short period afterwards, by agreement with the new owner. The same questions about licences, insurance and the 28-day exception then apply in reverse.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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