Queensland Moves Towards Proactive Seller Disclosure in Land Sales
The Queensland Government is poised to introduce a significant change in the approach to property transactions with the introduction of a seller disclosure regime for land sales. Departing from the traditional ‘buyer beware’ principle, the new laws will require sellers to proactively disclose relevant information to buyers.
This article explores the key aspects of the proposed regime and its potential impact on property transactions in Queensland.
New Statutory Seller Disclosure Requirements:
The Property Law Bill 2023 (Qld) was recently introduced in the Queensland Parliament, signalling the government’s commitment to enacting seller disclosure laws. This bill, which aims to replace the existing Property Law Act 1974 (Qld), has undergone a public consultation process, and a report from the Legal Affairs and Safety Committee has been tabled. While the commencement date is yet to be determined, the bill will introduce a range of disclosure requirements for the sale of registered land.
The new disclosure requirements will apply not only to residential properties but also to agricultural, commercial, industrial, and other freehold properties. This includes properties sold through auctions, by mortgagees or receivers, and those resulting from the exercise of an option, with some exceptions. Once enacted, sellers will need to provide buyers with a disclosure statement and prescribed certificates before signing the contract.
Disclosure Statement and Prescribed Documents:
The disclosure statement, in an approved form, will contain various pieces of information that must be true and signed by the seller or an authorised agent. It will cover crucial aspects such as unregistered encumbrances, zoning, environmental protection, tree applications, transport infrastructure proposals, heritage listing, government resumption notices, pools, commercial office buildings, rates, and water charges.
Prescribed documents accompanying the disclosure statement include title searches, survey plans, notices related to building and construction, pool compliance certificates, community management statements, and by-laws. However, certain information like flooding history, structural defects, historical use, building approvals, planning law limits, and property services will not be required to be disclosed.
Implications and Exclusions:
The proposed seller disclosure regime will fundamentally shift the dynamics of property transactions in Queensland. It aims to provide greater transparency and empower buyers with essential information. Sellers failing to comply with the disclosure requirements may face contract termination by the buyer.
However, there are exceptions to the disclosure obligations. Waivers will be able to be made by related parties or when the property price exceeds $10 million. Government buyers, statutory bodies, local governments, listed corporations, and their subsidiaries are likely to be exempt from these requirements. Leasehold properties and specific circumstances like co-owners, boundary adjustments, court orders, and transmission due to death will also fall outside the scope of the new regime.
Effect on Option Agreements:
One interesting part of the proposed disclosure obligations is their application to option agreements. If the grantee of a call option (or the grantor of a put option) is the same person as the buyer under the resulting contract, and the seller has already fulfilled their disclosure obligations before the option agreement was signed, they will not need to repeat the process. However, if a nominee exercises the option, the seller must comply with the disclosure requirements again.
Seeking Legal Assistance:
Queensland is on the cusp of implementing a seller disclosure regime that will shift the paradigm from ‘buyer beware’ to proactive seller disclosure. While the specific commencement date and final legislation are yet to be determined, once enacted the new laws will require sellers to provide comprehensive information to buyers, promoting transparency and informed decision-making. It remains crucial for both sellers and buyers to seek legal advice before entering into property transactions.