When a buyer defaults on a Queensland contract and the seller terminates properly, the seller may keep the deposit, claim damages and resell, in any combination. Recovery can go beyond the deposit, but any damages are generally reduced by the forfeited deposit. The contract's terms decide it.
Zettle Conveyancing is a solicitor-led online conveyancing practice for QLD, NSW and VIC, with offices in Maroochydore, Sydney and Melbourne.
At a glance
- This is about Queensland contracts, and the answer is contract-driven. The same default under a differently drafted contract can end differently.
- A standard Queensland contract lets a seller who terminates for buyer default keep the deposit, claim damages and resell the property, in any combination (Clancy v Carlson [2021] QDC 33).
- The forfeited deposit is generally credited against any damages. It reduces the claim rather than adding to it (same case).
- Recovering more than the deposit depends on terminating correctly and proving the loss.
- Where time is of the essence, a payment made late is a breach even if the money arrives a day or two later (Evans v Jan [2025] QSC 31).
What can a seller actually recover after a buyer defaults?
A standard Queensland contract usually gives a seller who terminates for buyer default a set of options. Broadly, the seller may do any or all of the following: keep the deposit, claim damages for the loss the default caused, and resell the property and look to the buyer for the difference.
If the property sells for less the second time, that shortfall may be recoverable. So may the costs of going back to market: holding costs such as rates, water and body corporate levies while the property sits unsold, a second agent's commission, and legal costs. All of it is subject to what the contract allows and to the usual duty to act reasonably to keep the loss down.
Any damages are generally reduced by the deposit the seller has already kept. In Clancy v Carlson [2021] QDC 33 the forfeited deposit was deducted from the seller's total loss before judgment.
Is a damages claim against a defaulting buyer automatic?
No. It's a claim like any other. The seller has to prove the loss, and there's always the practical question of whether the buyer has the money to pay it. Good records from the first day make the difference.
Why do the timing clauses decide so much?
Sellers tend to underestimate how little room a contract leaves on dates. Where the contract makes time of the essence, a payment or step that's late is a breach, whether it's late by a week or by a morning. Good intentions, a bank's daily transfer limit and an apologetic email don't move the date.
In Evans v Jan [2025] QSC 31, the buyer paid the deposit in instalments one to two days late. The seller terminated and kept the deposit, and the court upheld it. The selling agent had no authority to excuse the delay.
Can the agent agree to a late payment on the seller's behalf?
Generally, no. An agent isn't the seller. Reassurance from an agent that a late payment is fine doesn't amount to the seller agreeing to it, and a buyer who relies on that can still find the contract terminated.
The same caution runs the other way. If you're the seller and you want to allow a late payment, make that decision with your conveyancer and put it in writing, because allowing it informally can affect your own rights.
What should a seller do if a buyer defaults?
- Hold off on terminating until you've had advice. Terminating when you weren't entitled to can hand the buyer a claim against you.
- Talk to your conveyancer before you reply to the buyer or the agent. That includes anything that might read as agreeing to a late payment.
- Keep records from day one. Holding costs, the second campaign, the resale price. A loss you can't evidence is hard to recover.
- Read your own contract. What you can recover is set by the contract you signed, and the general position here is only a starting point.
For what happens step by step when a buyer can't settle, see what happens if a buyer defaults on a property contract in QLD and what happens if the buyer can't settle. For how the deposit is held and released, see how the deposit works when you sell.
Frequently asked questions
Is the forfeited deposit all a Queensland seller gets when a buyer defaults?
Not necessarily. Depending on the contract, a seller who terminates properly may also pursue losses beyond the deposit, such as a shortfall on resale and the costs of going back to market.
Can a seller keep the deposit and sue for damages?
A standard Queensland contract allows a seller to do both, with the deposit generally credited against the loss. The final amount depends on the contract and on what the seller can prove.
Does a selling agent have authority to accept a late payment?
Generally not. An agent isn't the seller, and in Evans v Jan [2025] QSC 31 the agent had no authority to excuse late deposit payments.
Is a late deposit a breach if it arrives a day later?
Yes, where the contract makes time of the essence. In Evans v Jan, deposit instalments paid one to two days late allowed the seller to terminate and keep the deposit.
What costs can a seller claim after a buyer defaults?
Depending on the contract and the evidence, a shortfall on resale, holding costs such as rates and levies, a second agent's commission and legal costs, reduced by the forfeited deposit.
Selling in Queensland? Zettle Conveyancing acts for sellers in QLD, NSW and VIC on fixed professional fees (government charges excluded), including fixed-fee Form 2 preparation for Queensland sellers, and you can run your matter from your phone. Get a fixed-fee quote
General information only, not legal advice. What a seller can recover depends on the contract and the circumstances, and terminating a contract incorrectly carries its own risk.
