Understanding the QLD Property Law Act 2023

In a significant legislative move, the Property Law Act 2023 (The Act) has been approved by Queensland’s Parliament, marking a fundamental change in the state’s property laws.

Replacing the 50-year-old Property Law Act 1974 (Qld), the Act will introduce substantial modifications aimed at simplifying, streamlining, and modernizing the existing legal framework.

Although the Act passed through Parliament on 25 October 2023 and received royal assent on 2 November 2023, its commencement awaits an official proclamation.

The anticipated delay in commencement is a strategic decision, allowing for extensive consultation, the formulation of new regulations, educational initiatives, and preparatory work by stakeholders across various sectors, including legal, financial, property, and community titles.

Objectives of the Act

The primary objectives of the Property Law Act 2023 are comprehensive, seeking to replace outdated legislation while simplifying, streamlining, and modernizing Queensland’s property laws.

A key focus is on adapting to contemporary needs, particularly by facilitating e-conveyancing and electronic transactions within the real estate industry.

Key Changes

Sale of Land Disclosure

An essential aspect of the Act is the introduction of a mandatory seller disclosure scheme for registered freehold lots in Queensland.

Sellers now bear the obligation of providing buyers with a signed disclosure statement and prescribed documents before completing the contract.

The Act grants buyers the right to terminate the contract if the information provided is inaccurate or incomplete on a material matter.

While termination does not trigger statutory compensation, the seller is required to refund the deposit and interest.

Limited exceptions to disclosure obligations exist for related buyers, government entities, and sales exceeding $10 million.

The Act also allows for the electronic signing and delivery of disclosure documents, aligning with contemporary practices.

Leases – Lessor’s Consent to Assignment or Other Actions

Lessees are now subject to a more defined process when seeking lessor consent for various actions such as assignment, subleasing, or changes in the use of premises.

The Act prohibits lessors from unreasonably withholding consent, providing a legal avenue for lessees to apply to the court for a decision if such withholding is deemed unjust (similar to the regime already applying to leases covered by the Retail Shop Leases Act).

Section 142 of the Act, a key provision in this regard, applies from the commencement of the Act and cannot be contracted out of.

Leases – Assignment of Lease – Enforceability of Covenants

The Act establishes a framework for the enforceability of covenants in lease assignments.

Lease terms now bind assignees to the extent the lessee was before the assignment, subject to lease provisions or written agreements.

Leases – Release of Previous Assignor on Subsequent Assignment

A novel provision in the Act stipulates that a lessee and guarantor are released from liability for breaches by a subsequent assignee.

However, this provision applies exclusively to leases entered into after the commencement of the Act.

Trusts and the Rule Against Perpetuities

Beyond leases and sale transactions, the Act introduces a significant transformation in trust regulations.

The conventional rule against perpetuities, mandating property interests to be established within 21 years after an individual’s death, has been replaced.

Instead, the Act introduces a fixed 125-year period from the trust’s initiation, offering enhanced flexibility and enabling longer-term trust strategies.

Existing trusts can transition to this new rule by adjusting the vesting date or creating a new legal document with the unanimous beneficiary agreement.

Stakeholders, however, are cautioned about potential tax and duty implications associated with altering existing trust arrangements.

Conclusion

The Property Law Act 2023 represents a noteworthy shift in Queensland’s property laws. Its multifaceted impact on sale transactions, leases, and trust regulations necessitates a proactive approach from stakeholders.

As we await the commencement date, we encourage clients and stakeholders to stay informed and seek expert advice as we prepare for the changes in Queensland’s property law landscape.

Contact Us

If you need assistance with a legal matter about property law, please contact the Gold Coast lawyers at ABKJ Lawyers on (07) 5532 3199 or contact us.