Buyer termination rights: Seller's disclosure regime

The introduction of the new seller disclosure regime under the Property Law Act 2023 (Qld)(PLA), commencing from 1 August 2025, marks a significant shift in how property transactions are conducted in Queensland.

Under the PLA, a seller must provide a buyer with a completed and signed Form 2 Seller Disclosure Statement with all prescribed certificates before the buyer signs a contract.

While the regime is designed to improve transparency and reduce disputes, it also introduces specific rights for buyers to terminate a contract if particular disclosure requirements are not met.

Grounds to Terminate

The buyer’s statutory termination rights are set out under section 104 of the PLA.

These rights cannot be contracted out of, meaning that they are enforceable regardless of the parties’ intentions or any special conditions in the contract.

Termination Ground 1: Failure to Provide the Disclosure Statement

The first ground for termination arises if the seller fails to provide the disclosure statement and prescribed certificates to the buyer, before the buyer signs the contract.

This is a strict requirement. The disclosure documents must be given to the buyer in full, and in a manner permitted under the legislation.

If the buyer signs the contract without having received the disclosure documents, they may terminate the contract at any time before settlement.

This right is absolute and does not require the buyer to prove any loss or disadvantage. The mere fact that the documents were not provided at the necessary time, is sufficient.

Termination Ground 2: Inaccurate or Incomplete Disclosure

The second ground for termination may arise if the disclosure documents were provided to the buyer before they signed the contract, but:

1. the information was inaccurate or incomplete in relation to a material matter affecting the property;
2. the buyer was not aware of the correct state of affairs at the time of signing the contract; and
3. the buyer can demonstrate that had they been aware, they would not have signed the contract.

To exercise this right, the buyer must satisfy all three criteria.

This ground is designed to protect buyers from being misled or disadvantaged by omissions or errors in the disclosure.  However, it also requires the buyer to demonstrate that the issue was material and that it influenced their decision to purchase. Arguably, a buyer cannot rely on this ground to terminate for minor technical errors or omissions, such as immaterial spelling mistakes or minor issues.

What Is a 'Material Matter'?

A material matter is any fact or circumstance that could reasonably be expected to influence a buyer’s decision to purchase the property.  Possible examples include:

•              an undisclosed easement that restricts development

•              a zoning classification that prohibits the buyer’s intended use

•              a contamination notice that affects the land’s value or usability

•              an unregistered lease that limits vacant possession

The Property Law Regulation 2024 provides further guidance on what is and is not considered a material matter. Importantly, some matters are expressly excluded from being material:

•              whether there is a relevant pool for the lot;

•              information relating to the rates for the lot; and

•              information relating to water services for the lot.

What Happens After Termination?

If the contract is terminated under either of the above grounds, the seller must refund any deposit paid by the buyer, along with any interest earned, within 14 days.  The buyer is not liable for any costs or penalties.

For agents, a termination may also affect their entitlement to commission.  If the contract is terminated before settlement, and the agent’s entitlement to commission is conditional on settlement occurring, the agent may not be entitled to receive a commission for the sale of the property.

For sellers and agents, the key to avoiding termination is compliance.  By understanding the disclosure obligations and following best practices, they can ensure a smooth and legally sound transaction.

If you are involved in a property transaction after 1 August 2025, make sure you understand your rights and responsibilities under the new regime. When in doubt, seek legal advice.

DISCLAIMER: This article is provided for information purposes only and does not constitute legal advice and should not be used as such. Formal and independent legal advice should be sought in particular matters. REIQ cannot and does not warrant and nor does it represent in any way that the information contained herein is current and/or will remain current beyond the time and date of release.

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