Important changes to property law in Queensland - Seller's Disclosure Regime
On 25 October 2023, the Queensland Government passed the Property Law Bill 2023 – replacing the Property Law Act 1974. This Bill introduces a raft of changes to property law, that will impact property sales and leasing in Queensland.
The Bill will commence on a date fixed by proclamation. This means a date to be set by Parliament in future. The REIQ will keep members up to date in relation to the commencement of the Bill.
REIQ members can access comprehensive factsheets that set out the changes in detail and how they will impact you as an agent:
- REIQ Factsheet – Seller’s Disclosure Regime
- REIQ Factsheet – Property law changes for sales and leasing
Seller's Disclosure Regime
A new mandatory Seller’s Disclosure Regime has been introduced in Queensland. This regime applies to the sale of both residential and commercial property in Queensland.
Once the regime commences, a seller will be required to provide a disclosure statement and prescribed certificates in relation to the property they are selling, to a prospective buyer before a contract of sale is signed by the prospective buyer.
There are specific requirements for how the disclosure documents must be prepared, what must be included and how it must be given to the buyer.
In Queensland, real estate professionals are permitted to prepare and exchange the disclosure documents on behalf of their client (the seller).
There are some limited exceptions that apply to specific property transactions.
The buyer may be entitled to terminate a contract of sale any time before settlement if the disclosure documents are not provided correctly, or there is a mistake or omission that relates to a material matter, which the buyer was not aware of and had they been aware, they would not have entered into the contract.
Have questions? Join the REIQ for a live Q&A on the Seller’s Disclosure Regime on Friday 3 November 2023 at 11:00am. Register here.
Property sale transactions
Provisions relating to the settlement of contracts have been updated to reflect modern conveyancing processes, including electronic conveyancing. These changes will not likely have a significant impact on real estate professionals, however it is important to be aware of these changes and to direct your clients to seek legal advice if they need assistance.
Provisions dealing with a delay of settlement due to an adverse event (such as weather, public health emergency, act of terrorism, war or similar event) now apply. These provisions largely reflect the current ‘delay event’ provisions in the REIQ Contracts.
New provisions also relate to inoperative computer systems for electronic conveyances on the date of settlement, to ensure consistency between paper-based and electronic transactions.
The new provisions confirm that unless the easement specifically confers a covenant to a party personally, both positive and negative covenants contained in registered easements will bind a grantor and the grantee of the easement, and their respective successors in title.
Right to rescind contract of sale on destruction of or damage to dwelling house
Provisions relating to the right of a buyer to rescind a contract for the sale of a house that has been destroyed or damaged resulting in the property to be unfit for occupation now clarifies the buyer’s right to termination. This right will end on the earlier of:
- the buyer taking possession of the property; or
- the seller rectifying the dwelling so that it is returned to the condition it was prior to the damage or destruction.
The buyer also now has a right to inspect the dwelling to confirm it has been returned to the condition it was in prior to the damage or destruction.
Leases for commercial premises
Assignment and sublease of leases
Where a lessee requests consent of the lessor to deal with their lease, including to assign or sublet their lease to another party, the following requirements will apply:
- the lessor will have one month to consider and decide if they will consent to the request;
- in the event the lessor fails to consent, the lessee may apply to the court, which has been given broad powers to make appropriate orders; and
- the lessee must provide information as required under the lease or by the lessor, to allow the lessor to make a decision about the assignment.
The law has also been altered by releasing a lessee and a lessee’s guarantor for any breaches of the lease by subsequent assignees.
Breach of Lease
The requirement of a lessor to serve a notice to remedy breach on the lessee, in order to re-enter or forfeit a lease for a breach of term, has been updated.
The changes require a copy of the notice to be served on designated persons (which includes mortgagees, receivers, guarantors and sublessees). These designated persons are also given rights to make a court application to seek relief from forfeiture.
The lessor no longer needs to serve a notice to remedy breach where the lessor reasonably believes that the lessee has given up possession of the premises.
Procedural changes have been made to the process relating to how a lessor can refuse a lessee’s exercise of option to extend or renew their lease, in the event that the lessee is in breach of the lease.
Additionally, where a breach of the lease occurs after the notice of an exercise of option is given by the lessee to the lessor, the lessor is still required to provide a further prescribed notice before the lessor can refuse the lessee’s option on the basis of the subsequent breach.
The provision does not entitle a lessee to relief where the lessee does not exercise the option within the requisite time stated under the lease.
REIQ members can download the 'Seller's Disclosure Regime' and 'Property law changes for sales and leasing' factsheets here.
The REIQ will be introducing new resources and delivering training events to ensure all real estate professionals in Queensland are prepared for these changes. Additionally, the REIQ Contracts will be updated prior to commencement.
Don’t miss out on important updates. Make sure you are subscribed to the REIQ Journal.
REIQ Members can contact the Agency Advisory Service on 1300 697 347 for free agency advice on these changes.
Read more news and updates from the REIQ here.
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