At present, Queensland has no formal seller disclosure regime on the sale and purchase of established residential freehold land only for Unit sales.
Under the Property Law Bill 2023 sellers of freehold land must disclose relevant information to a proposed buyer in a single document along with any prescribed Certificates.
Currently, the law in Queensland reflects the historical position that risks are placed on the buyers to seek any defects and faults in a property. Sellers are not required to disclose all relevant information to potential buyers. The need for searches will not be totally obviated by these changes nor, realistically, might a buyer accept the Disclosure Statement on face value.
The rationale behind the regime is to streamline current processes and provide buyers efficiency and transparency to information that will allow them to make better informed decisions about property transfers prior to entry into a contract of sale.
What does this mean?
A disclosure statement must be given to the buyer before the buyer enters into a contract with the seller for the sale of the lot. The warranties contained in the new seller disclosure statement will not be able to be contracted out of.
Prescribed Form
The disclosure will need to be made in the approved form
The regime will require the seller to include information (prescribed certificates) such as:
• there are no current easements, covenants or encumbrances affecting the property – should show on the Title Certificate if registered
• there are no tree orders or applications affecting the property – search required
• written notice is not required under the Environmental Protection Act 1994 - search required
• no building work has been carried out by an unlicensed person in the last six years – how would a buyer selling after owning the property for a couple of years know.
• no warranties are given about the structural soundness of the building or improvements on the property
• there are no current orders, notices or transport proposals affecting the land issued by a relevant authority that may affect the title or use of the land after settlement. -need to be searched in multiple registers
Depending on the property type, the seller is required to give certain documents with the disclosure statement, including the following:
• current title search
• registered survey plan
• body corporate certificate
• Community Management Statement for the community titles scheme
• pool compliance certificate
• tree order under the Neighbourhood Disputes Act
• unlicensed building work under the Queensland Building and Construction Act
• rates notice
• water services notice
• notice regarding a transport infrastructure proposal.
The draft statement does not at this stage 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.
Effects on the seller:
If the Bill is passed, this will bring significant change in how property transactions and contracts are conducted in Queensland.
The draft Bill provides that a seller’s failure to comply with the statutory disclosure requirements may entitle the buyer to terminate the contract at any time prior to settlement or claim damages.
From a decision to sell to listing could take up to month obtain all the searches you need to assemble a Statement.
REIQ CEO Antonia Mercorella said while the real estate peak body supported the introduction of a uniform statutory seller disclosure regime, this support was subject to the establishment of appropriate disclosure parameters and reasonable costs and accessibility to information associated with disclosure requirements.
The REIQ has raised a number of concerns with the proposed legislation including:
• impractical and unnecessarily complex requirements associated with the provision of a disclosure statement at auctions
• ambiguity regarding circumstances giving rise to buyer termination rights
• onerous obligations on sellers to disclose and describe unregistered encumbrances to buyers
• yet to be determined flood-related disclosures and warnings.
Regarding auctions Ms Mercorella said that among the REIQ’s material concerns, was the proposal to require disclosure documents be provided in different ways depending on whether a bidder arrived before or just after the commencement of an auction.
It remains to be seen whether there will be sufficient infrastructure and resources to support sellers and ensure equal accessibility and reasonable costs for sellers to access information required to comply with this disclosure regime.
If you are going to take the significant step of introducing a formal disclosure regime into Queensland, it’s essential that there are appropriate infrastructures in place to support it. These searches are all going to cost time and money.
New business opportunities will arise for the search companies that provide Unit Disclosure Statements and law firms to fill in the gaps in the market.
For Agents preparing disclosure statements for Sellers may well involve increased risk and increased Professional Indemnity Insurance rates once the court cases start.
We will all have to wait until the bill has cleared Parliament to see where we finish up.
David Hamilton
Director, First National Palm Beach, The Pines & Burleigh
PO Box 500, Palm Beach, Qld 4221| P: 075559 9600 | F: 075598 2110 | M: 0419763 924
E: DavidH@palmbeachfn.com.au