We’ve been waiting for 25 years, but it appears that the Queensland government may finally be about to improve the embarrassingly poor quality of Contracts for the sale of real estate.  

The Commercial and Property Law Research Centre at the Queensland University of Technology is a specialist network of researchers with a vision of reforming legal and regulatory frameworks in the commercial and property law sector. The public can make submissions regarding their report up to 10 November 2017.

The Current Situation

The current process requires a Buyer to sign a Contract without the Seller disclosing the most fundamental of information which would directly impact upon whether (i) the Buyer would want to buy the property, and, (ii) at what price the Buyer would be prepared to pay for the property.

It is almost beyond comprehension, but the current process requires the Buyer to sign the Contract:

  1. without a title deed search which verifies the name of the owners, and whether the property is affected by any easement, covenant, vegetation management statement or other encumbrance;
  2. without a survey plan which verifies the area and dimensions of the lot, and if there is an easement,  the area and dimensions of the easement;
  3. without details of the local authority rates and water charges that are payable for the property;
  4. without details of the car parking area applicable for the property;
  5. without knowing the current zoning for the land;
  6. without knowing whether the land is contaminated;
  7. without knowing whether any building work on the property was completed by an unlicensed builder

Commercial and Property Law Research Centre: Report

The Commercial and Property Law Research Centre at the Queensland University of Technology is a specialist network of researchers with a vision of reforming legal and regulatory frameworks in the commercial and property law sector.  Click here to read the entire report.

Here are their final recommendations:

Recommendation 1:

A statutory seller disclosure regime should be enacted in Queensland.

Recommendation 2:

The legal framework for seller disclosure should be based upon the following four Guiding Principles:
1. information to be provided by the seller to the buyer pre-contract should be within the seller’s knowledge or readily available by search at reasonable cost to the seller;
2. information should be of value to a buyer in making a decision to purchase. Primarily this will be information impacting on title to the property or ongoing financial liability of ownership;
3. the information should be in an accessible form, easily understood and capable of being relied upon by the buyer; and
4. a single legal framework should be established providing consistency in the content and timing of disclosure and remedies available for a failure to comply.

Recommendation 3:

Seller disclosure should be required for all sales of freehold land, including sales by auction, mortgagee or receiver sales and options for the sale or purchase of land.

Recommendation 4:

The proposed seller disclosure regime for sales of land in Queensland, should not apply to:
 a sale of land between related parties – family members, related companies or parties to a partnership;
 a sale of land between two or more co-owners;
 a sale between owners of adjoining land for the purpose of a boundary realignment;
 a court ordered sale of land;
 a sale by the Sheriff or a local government to enforce a judgment;
 a sale where the buyer is the State or a statutory body;
 a sale where the buyer is a publicly listed company;
 a transfer giving effect to a will (transfer to a personal representative or beneficiary);
 a sale of a proposed lot under the Land Sales Act 1984 or Body Corporate and Community Management Act 1997; or
 a sale of land where the purchase price is greater than $5 million (exclusive of GST) and the buyer has given the seller a written notice signed by the buyer, stating that the buyer waives the seller’s disclosure obligation.

Recommendation 5:

A separate seller disclosure regime should be maintained for proposed lots under the Land Sales Act 1984, the Body Corporate and Community Management Act 1997 and the Building Units and Group Titles Act 1980 as part of the initial implementation of a statutory seller disclosure regime.

A seller of a proposed lot under the Body Corporate and Community Management Act 1997 should be required to attach a copy of any Building Management Statement that will be registered over lots in the scheme.

Later stages of the implementation may include a review of this recommendation and consideration of the feasibility of integrating the seller disclosure obligations for existing lots and proposed lot within the same Act.

Recommendation 6:

The disclosure information must be provided to the buyer before the buyer enters into the contract of sale.

Recommendation 7:

An approved form of seller disclosure statement containing prescribed information and prescribed statements should be adopted. Prescribed certificates are not part of the approved form and must be given to the buyer at the same time as the statement but are not required to be attached to the statement.

Recommendation 8:

An approved form of body corporate certificate containing prescribed information should replace the disclosure statement and body corporate information certificate currently required by section 205 and 206 of the Body Corporate and Community Management Act 1997.

The body corporate should be required to provide an interested person with a body corporate certificate within five business days after receiving a written request accompanied by the prescribed fee.

Recommendation 9:

The contents of a seller disclosure statement should be consistent with Guiding Principles 1 and 2. The information should be of value to a buyer as part of the decision to purchase and be information within the knowledge of the seller or readily available at a reasonable cost.

Recommendation 10:

A seller should be required to disclose:
a.  a current title search and details of any unregistered or statutory encumbrances;
b.  a copy of the registered plan for the lot and exclusive use plan (if applicable);
c.  the current zoning for the land;
d.  whether the land is on the contaminated land register or environmental management register (s 408 Environmental Protection Act 1994);
e.  if a tree order or application exists for the land (s 83 Neighbourhood Disputes (Dividing Fences and Trees) Act 2011);
f.  a pool certificate or notice of no pool certificate under the Building Act 1975;
g.  if a Building Energy Efficiency Certificate is registered under the Building Energy Efficiency Disclosure Act 2010;
h.  notice of any building work by an unlicensed builder;
i.  a copy of the last rates notice and water notice;
j.  details of any notices, orders or transport infrastructure proposals for the land issued by the state or local government; and
k.  if the property is an existing lot in a community titles scheme under the Body Corporate and Community Management Act 1997 or an existing lot under the Building Units and Group Titles Act 1980, a body corporate certificate.

Recommendation 11:

A body corporate certificate, in the approved form, should be given to a buyer of an existing lot in a community titles scheme under the Body Corporate and Community Management Act 1997 or an existing lot in a body corporate under Building Units and Group Titles Act 1980 before the buyer enters into a contract to buy the lot. The body corporate certificate may be attached to the seller statement or given separately.

Recommendation 12:

A body corporate certificate should contain both lot specific information and prescribed information to inform the buyer about responsibility of living in a community titles scheme.

Lot specific information may relate to:
 the details of the lot;
 contact details of the body corporate secretary;
 current levies and other amounts payable by the lot owner;
 the contribution and interest schedule lot entitlements;
 outstanding amounts payable by the lot owner;
 the sinking fund balance as compared to the sinking fund forecast; and
 the current insurance for the body corporate.

Prescribed information may relate to:
 the obligation of lot owners to pay levies;
 how levies are calculated;
 body corporate duties to regulate and maintain common property;
 rights of lot owners in relation to common property and exclusive use rights;
 the ability of the body corporate to regulate behaviour and other activities through bylaws.

Recommendation 13:

The seller statement should contain a clear warning to potential buyers that particular information which may be relevant to the value of the property is not included with the seller statement.

The warning should read:

This statement does not include information about:
 Flooding history
 Structural soundness of the building or pest infestation
 Current or historical use of the property
 Current or past building approvals for the property
 Limits imposed by planning laws on the use of the land
 Services that are or may be connected to the property

You are encouraged to make your own inquiries about these matters prior to signing a contract.
You may not be able to terminate the contract if these matters are discovered after you sign.

Recommendation 14:

The seller disclosure legislation should authorise a seller statement to be:
a. given to the buyer in paper or electronic form (via an electronic communication); or
b. made available to the buyer by:
(i) providing a link to a website or other shared location; or
(ii) for a sale by auction, by being put on conspicuous display on the day the auction is held.

Recommendation 15:

The seller statement should be accurate at time it is given or made available to the buyer. No obligation should be imposed on the seller to update the information after it is given.

Recommendation 16:

In the case of a dispute, the onus of proving that the seller complied with the statutory disclosure obligation should rest with the seller.

Recommendation 17:

Failure by the seller or agent to make the seller statement available to the buyer prior to entering into a contract of sale is an offence.

Recommendation 18:

If the seller:
 fails to provide the seller statement (or body corporate certificate, where required) to the buyer prior to the buyer entering into the contract of sale of the property; or
 provides a seller statement (or body corporate certificate, where required) that is inaccurate,

the buyer is entitled to avoid the contract at any time prior to settlement only if:
 the failure to disclose to the buyer or the defect in the seller statement or body corporate certificate relate to the existence of a material matter affecting the land;
 the buyer was unaware of the existence of the matter when the contract was entered into; and
 the buyer would not have entered into the contract had she or he been aware of the matter.

Recommendation 19:

Where another Act provides a remedy for a failure to disclose information on the sale or transfer of land, the remedy under that Act will take precedence over the remedy under the statutory seller disclosure regime.


Disclaimer: The above is to be considered as general education. This is not advice and it is not to be acted upon without advice from a qualified professional who understands your personal circumstances.

Copyright © 2017 Wockner Lawyers. All Rights Reserved. Contact Wockner Lawyers – [email protected]. This article may not be used without the prior written consent from the author. See below for more details…

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