# Subject to finance in Queensland: how the contract's loan clause works
The finance condition in a Queensland contract runs on three schedule boxes, a 5pm deadline and a written notice. What each side must do, and what silence means.
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"Subject to finance" is the best-known phrase in Queensland property and one of the least read. Buyers treat it as a general safety net: if the bank says no, the deal is off. Sellers treat it as a period of waiting. Both are roughly right, and both tend to be surprised by how the clause actually operates, because it does very little automatically. It gives each side a right, attaches each right to a time of day, and leaves it to the parties to act.
This guide goes through the finance condition in the standard contract published by the Real Estate Institute of Queensland and the Queensland Law Society, as it reads in the first edition in use since 1 August 2025. It covers how the condition is switched on, what the buyer has to do while it is running, how the notice works, what happens when nobody says anything, and how the condition sits beside the cooling-off period. It concerns the contract's mechanics only. How lenders assess a loan is a different subject. Nothing here is advice on a particular contract.
3 boxesmust all be completed for the clause to apply
5pmon the finance date, the hour the notice is due
1 remedyfor the seller if no notice comes: termination
REIQ and Queensland Law Society Contract for the Sale and Purchase of Residential Real Estate, first edition, reference schedule and clause 4.1.
## Three boxes that switch the clause on
The finance condition is printed in every copy of the standard contract. Whether it applies to a given sale depends on the reference schedule at the front. Under the heading for finance there are three items: the finance amount, the financier and the finance date. The printed note beside them is direct: unless all of the three are completed, the contract is not subject to finance.
That note decides more disputes than any other line on the page. A buyer who tells the agent the offer is subject to finance, and signs a contract in which one of the three boxes is empty, has signed an unconditional contract as far as the loan is concerned. The Queensland Government's guidance on contracts of sale makes the general point about every condition: the contract may include conditions such as finance approval, and it is the buyer's responsibility to make sure they are in the contract at signing.
Each box does a job. The finance amount is the loan the buyer needs, and it can be written as a figure or in words such as an amount sufficient to complete the purchase. The financier is the lender, which can be named or described more broadly. The finance date is the deadline, written as a calendar date or as a number of days from the contract date. How tightly each is drafted affects how the clause can later be used, which is why the wording is settled before signing and not after.
## What the clause promises
Clause 4.1(1) states the condition in one sentence. The contract is conditional on the buyer obtaining approval of a loan for the finance amount from the financier by the finance date, on terms satisfactory to the buyer.
Four elements are packed into that sentence. There must be an approval, which is something a lender gives. It must be for the amount in the schedule. It must come from the financier in the schedule. And its terms must be satisfactory to the buyer, which makes the buyer the judge of whether an approval hedged with conditions is good enough.
The contract does not define approval further, and it says nothing about the informal stages lenders use before a formal decision. An indication of borrowing capacity obtained before the buyer found the property is therefore not something the clause mentions. What the clause asks is whether, by the finance date, the buyer holds an approval for this purchase that the buyer is prepared to rely on. A buyer who gives notice that the condition is satisfied has made that call, and from then on carries the risk if the lender's position changes.
## The buyer's duty to try
The second sentence of clause 4.1(1) is short: the buyer must take all reasonable steps to obtain approval.
The Queensland Law Handbook, published by Caxton Legal Centre, explains what that means in practice. A buyer cannot escape the contract simply by not applying for a loan. A buyer who does nothing, and then claims finance was not approved, has not used the condition; the handbook's description is that failing to apply is a breach of contract, with the deposit at risk and a damages claim possible.
Reasonable steps are judged on what happened. Applying promptly, supplying the documents the lender asks for, and following up are the ordinary evidence of a genuine attempt. A buyer who terminates under the clause may later be asked what was done and when, and the answer is easier to give from a file of dated emails than from memory.
The duty also frames the choice of financier. If the schedule names one bank, the reasonable steps are steps to get approval from that bank. A buyer who intends to use a broker and several lenders is better served by a description wide enough to cover them.
## The notice, and the hour it is due
The condition does not resolve itself. Under clause 4.1(2) the buyer must give the seller a notice, and the notice says one of two things. Either approval has not been obtained by the finance date and the buyer terminates the contract. Or the finance condition has been satisfied, or waived by the buyer.
The deadline for that notice appears in the next subclause: 5pm on the finance date. The contract's general provisions on notices then govern how it is given. Under clause 11.3 a notice may be delivered or posted to the other party or its solicitor, or sent to the email address for the other party or its solicitor shown in the reference schedule. An email is treated as given at the time it is sent. A notice delivered by hand or by email after 5pm on a business day is treated as given at 9am on the next business day.
Put together, those rules make the last hour matter. A finance notice emailed at 4:50pm on the finance date is on time. The same notice emailed at 5:10pm is treated as given the following morning, after the deadline. Notices under the clause are normally sent between the solicitors or conveyancers for the two sides, to the address in the schedule, and not through the agent.
Waiver is the third possibility built into the notice. Because the condition exists for the buyer's benefit, the buyer can give it up. A buyer who has decided to proceed whatever the lender says, perhaps because other funds are available, may give notice that the condition is waived. The contract is then unconditional as to finance in the same way as if approval had been given.
The finance date: three outcomesClause 4.1 of the standard residential contract
By 5pm on the finance date
Effect on the contract
The deposit
The buyer gives notice that finance is satisfied or waived
The condition is spent and the sale proceeds.
Stays with the deposit holder until settlement.
The buyer gives notice that approval was not obtained and terminates
The contract ends without default by the buyer.
Returned to the buyer under clause 2.3.
The buyer gives no notice
The contract continues, but the seller gains a right to terminate.
Depends on what either side does next.
## What silence means
The third row of the table is where the clause departs from what most people expect. If the buyer says nothing by 5pm on the finance date, the contract does not end. It also does not become unconditional. It enters a state in which either side can move first.
Clause 4.1(3) gives the seller the first option: the seller may terminate the contract by notice to the buyer if the buyer's notice was not given by 5pm on the finance date. The subclause adds that this is the seller's only remedy for the buyer's failure to give notice. The seller cannot treat the missed notice as a default, keep the deposit and sue.
Clause 4.1(4) gives the buyer the second option. The seller's right to terminate is subject to the buyer's continuing right to give written notice of satisfaction, termination or waiver. So long as the seller has not yet terminated, a buyer who is a day late can still send the notice, and it still takes effect.
The result is a short race with no fixed finishing line. After the deadline the seller may end the contract at any moment. The buyer may confirm or terminate at any moment. Whoever gives notice first decides the outcome.
After the deadline
A missed finance notice ends nothing by itself
If the buyer is silent at 5pm on the finance date, the contract stays on foot. The seller may then terminate, and until the seller does, the buyer may still give notice of approval, waiver or termination. Neither side should assume the other has let the matter rest.
For sellers the practical point is that an overdue finance notice calls for a decision. A seller who wants certainty can terminate and return to the market, or can ask the buyer's solicitor where the approval stands. Waiting without a word leaves the buyer free to confirm, and equally free to terminate, on any later day.
## Asking for more time
Lenders do not work to contract dates, and a common message in the days before the finance date is that the valuation or the final sign-off is running late. The clause has no extension built into it. The contract's short extension mechanism in clause 6.2, which lets either party push settlement back by up to five business days, applies to the settlement date and nothing else.
A later finance date is therefore a change to the contract, and it needs the seller's agreement. Sellers are not obliged to give it. Many do, because a buyer with a loan nearly approved is usually worth a few more days. Some agree on terms, such as a shorter extension than was asked for.
How the agreement is recorded matters as much as whether it is given. Law firm Attwood Marshall, writing on 30 April 2026 about a Supreme Court decision on a late deposit, reported the court's finding that the selling agent had no actual or ostensible authority to grant an extension on the seller's behalf, and advised that variations be handled between the parties' solicitors. The reasoning carries across to finance dates. An agent's reassurance by text that a few more days will be fine is not the seller's agreement. A request made before the deadline, answered in writing by the seller's solicitor and stating the new date, is.
## Money after a finance termination
A buyer who terminates properly under clause 4.1(2) has not defaulted. Clause 2.3(1) of the contract says the party entitled to the deposit, where the contract is terminated without default by the buyer, is the buyer. Any interest earned on an invested deposit follows it.
The buyer's recovery stops there. The same clause says that once the buyer receives the deposit and any interest, the buyer has no further claim unless the termination was due to the seller's default or breach of warranty. Money spent along the way, such as a lender's application or valuation charges or the cost of a building report, stays spent. The seller, for the same reason, is not compensated for the weeks the property was off the market.
Timing interacts with the deposit in one more way. Many contracts make the balance of the deposit payable on or just after the finance date. A buyer who gives notice that finance is approved should expect the balance deposit to be the next deadline, and it is an essential term of the contract in its own right.
## Finance and cooling-off are different exits
The finance condition is often confused with the statutory cooling-off period, and the two can run at the same time early in a contract. They differ in source, length and cost.
Cooling-off comes from legislation. The warning printed above the buyer's signature on the contract says the contract may be subject to a five business day statutory cooling-off period and that a termination penalty of 0.25 per cent of the purchase price applies if the buyer terminates during it. The Queensland Government's guidance adds that it applies to residential property contracts and not to auctions. A buyer needs no reason to use it.
The finance condition comes from the contract. It lasts as long as the parties agreed, often longer than five business days. It costs nothing to use, but it can be used only for its purpose: the loan was not approved despite reasonable steps. A buyer who has simply changed their mind inside the first five business days has the cooling-off right. A buyer whose lender has declined has the finance right. Using the wrong one, or the right one late, is where money is lost.
A worked example gives the proportions. The figures are illustrative. On a purchase at $750,000, a buyer who cools off pays a penalty of 0.25 per cent, which is $1,875. A buyer who terminates under the finance condition after a genuine refusal pays nothing to the seller and recovers the whole deposit.
## A finance period, day by day
The sequence below shows how the dates in an ordinary contract fall. It assumes, for illustration only, a contract dated Monday 1 June 2026 with a finance date 14 days later, on Monday 15 June 2026.
Fourteen days subject to financeIllustrative dates
Monday 1 JuneBoth parties sign. The schedule shows the finance amount, the financier and a finance date of 15 June.
First weekThe buyer lodges the loan application and supplies documents. These are the reasonable steps the clause requires.
Second weekIf approval looks late, the buyer's solicitor asks the seller's solicitor in writing for a later date.
Monday 15 June, before 5pmThe buyer gives notice: satisfied, waived, or not approved and terminated.
After 5pmIf no notice was given, the seller may terminate, and the buyer may still give notice until the seller does.
The second step is the one that protects a buyer most. Clause 8.1 of the contract puts the property at the buyer's risk from 5pm on the first business day after the contract date, and the deposit is usually already paid, so a buyer in a finance period has commitments running before the lender has answered. Starting the application on day one leaves the most room for the unexpected.
## Offers without a finance condition
Leaving the three boxes blank is a choice, and in a competitive sale it is sometimes a deliberate one. A seller comparing two offers at the same price will often prefer the one with fewer conditions. A buyer who makes an unconditional offer is promising to complete whether or not a loan is approved, with the deposit forfeited and a claim for any loss on resale if the money is not there on settlement day.
Between the two extremes lie the terms the parties can adjust: a shorter finance period, a named lender, a larger deposit paid sooner. Each shifts some risk from one side to the other, and each is written into the schedule or a special condition before signing.
> The finance clause gives a buyer a way out and a seller a way to stop waiting. Each works only through a written notice, and each has a clock on it.
Understood that way, the phrase on the flyer becomes a set of tasks. The buyer fills in three boxes, applies at once, watches one date and gives one notice. The seller notes the same date and decides, if it passes in silence, whether to wait or to end the contract. The clause does the rest.