Queensland is on track to require a stronger duty of disclosure upon sellers, bringing them in greater alignment with Australia’s southern states. These reforms are a part of the Property Law Bill 2023, which will have significant implications for property lawyers practising in Queensland. The Bill was read for the third time on 25 October 2023 and will become law upon receipt of Royal Assent. The new Property Law Act 2023 will commence on a date set by proclamation. As a consequence, it is not a matter of if, but when the reforms will commence.
We spoke to College of Law lecturer Tara Cush on the implications of these reforms, what they involve, and what lawyers need to know.
What you need to know?
The Property Law Act regulates a range of areas, including the sale of real property, mortgages, leases and deeds.
“The ‘2023 Property Law Bill’ is very significant,” Tara explains. “It is not an amendment to the ‘Property Law Act 1974’ but a complete overhaul - one that is forty-nine years in the making.”
“Even if specific content has not changed in the legislation, the content will be located in a different section of the Act. So even well-seasoned professionals will need to be on top of the changes,” Tara notes.
One of the most significant changes relates to the sale of real property.
“The Seller currently has a limited duty of disclosure with respect to the property,” Tara says. “The Bill changes this and will bring Queensland closer in line with the southern states.”
What do the ‘duty of disclosure’ reforms involve?
“The duty of disclosure on the seller will be significant, and some may say onerous,” Tara says.
Please see below for a summary of the reforms to the duty of disclosure:
- The duty cannot be contracted out of.
- There are limited exceptions - it even applies to sale by auction.
- Seller must provide the buyer a disclosure statement in a prescribed form (to be specified in the Regulation to the Act) and a prescribed certificate.
- Example of information to be included in the disclosure statement: zoning, unregistered encumbrances, contamination.
- Example of warnings to be included in the disclosure statement: zoning, potential flooding.
- Example of prescribed certificates: title search, pool compliance, current rates notice.
- There is no obligation on the seller to update the disclosure statement, so long as the contents were accurate at the time of providing the statement to the buyer.
- The onus is on the seller to prove the provision of the disclosure documents.
- The disclosure documents must be provided by the seller prior to the buyer signing the contract of sale.
- If the duty is breached, the Buyer may terminate the contract.
“The new Act will require another edition of the REIQ contract to be created and released,” Tara explains.
How might this affect real estate agents?
These reforms will also affect real estate agents.
“Real estate agents will need to be aware of the disclosure obligations of the seller, and assist in the seller meeting those obligations,” Tara says. “If I was a principal of a real estate firm, I would currently be organising training for real estate agents."
“In the alternative, sellers will need to consult a solicitor much sooner in the conveyancing process to ensure those disclosure obligations are met,” Tara explains. “Solicitors acting on behalf of buyers will need to ensure the disclosure obligations have been met and the consequences for the buyer if the obligation was not met.”
Tara encourages property lawyers to familiarise themselves with the Bill and the new Act once the Act becomes law.
“There are a number of other important changes with respect to assigning a lease, breach of lease and the limitation period with respect to deeds,” Tara says.
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