The Property Law Bill 2023 (the Bill) was introduced to parliament in February this year. The Bill is expected to pass and be enacted in October this year however the commencement date of the Act, when passed is likely to be delayed for 6 to 12 months to allow time for the new Regulations and for education.
The Bill will replace the existing 1974 Property Law Act and will introduce a number of new changes to Property Law practice in Queensland. One of the most significant changes is an obligation on the Seller of any property in Qld (unless the sale price is in excess of $10m), to provide a prospective buyer with a detailed pre contract Disclosure Document before the Buyer signs any Contract to purchase the Property.
Professor Christensen who has been intrinsically involved in drafting the Bill has advised (in Proctor- 28 June 2023) that:-
The following are key elements of the Disclosure Regime:-
- Applies to all freehold land, including units but there are a number of exceptions listed in s100;
- Applies to sales by private treaty and auction;
- Seller is obliged to disclose information before contract;
- Disclosure by the seller is required to be given using an approved form with some prescribed certificates attached;
- The information to be disclosed mirrors existing statutory, common law or contractual disclosure requirements, including a title search, registered plan, tree orders, contaminated land notice, heritage listings, transport proposals. Some additional information is required such as a body corporate information certificate and a Community Management Statement. A BMS is not required to be attached but the existence of a BMS must be acknowledged by the seller in the disclosure statement;
- The disclosure must be accurate at the time it is given;
- If there is a material inaccuracy or omission in the disclosed information and the buyer was not aware of this inaccuracy or omission at the time of contract, the buyer may terminate; and
- If the buyer terminates there is no statutory right to compensation.
Disclosure
The approved form of the disclosure statement and prescribed certificate is yet to be settled by regulation to be drafted after the new Act is passed. As well, alterations may be required to the standard REIQ/QLS Contracts of Sale to accommodate the introduction of this more extensive statutory disclosure. There are several other general matters to note which are apparent now from the Bill.
- It will not be possible to contract out of the seller disclosure requirement (s98)
- The requirement applies to all sales of registered lots under $10 million (incl GST) including residential and non-residential property.
- Seller disclosure does not apply to sales of registered land over $10 million (incl GST) provided the buyer gives the seller(s) a notice waiving compliance with the requirement prior to contract. (s100(k) (i)(B) and (ii)).
- The disclosure regime only applies to lots under the Land Title Act 1994 and does not include a proposed lot under the Land Sales Act 1994 or Body Corporate and Community Management Act 1997 where existing requirements will continue to apply.
- A buyer may terminate a contract up until settlement where: a) the seller fails to give the buyer a disclosure statement or a prescribed certificate before the buyer signs the contract; or b) the statement or certificate given to the buyer is inaccurate in relation to a material matter affecting the lot at the time it is given to the buyer AND the buyer at the time of signing the contract is not aware of the correct state of affairs AND had the buyer been aware of them, the buyer would not have signed the contract. This standard for termination is not the same as the material prejudice’ test which is a subjective test as to how the failure or inaccuracy affects the buyer.
- The only remedy is termination of the contract and refund of the deposit and any interest paid (s105, s106(1) and (2)). The Bill does not give a buyer a right to any other compensation, including for an inaccurate prescribed certificate prepared by a third party eg. body corporate manager or secretary.
- Certain sellers are not required to give disclosure (s100) (See eg related parties (as defined in s96), the State or statutory bodies, local governments, listed corporations, etc (as defined in s95)
- The disclosure statement and prescribed certificate may be given electronically (s99(7) and s102).
This proposed Disclosure Regime is similar to the system that has applied in NSW for many years. Sellers/ Sellers agents/ lawyers will need to ensure that the searches required to complete the Disclosure are done and the Disclosure is completed in the required form and provided as required. The form of the disclosure has not yet been regulated.
For more information please contact Matthew Weaver or Annalyse Harvey.