The Property Law Bill 2023 targets modernising the current property laws contained within the Property Law Act 1974 with contemporary language that reflects current commercial practice. One of the most significant changes which will take place is a new statutory disclosure regime for Queensland property sellers.
Currently, there are no formal seller disclosure requirements other than for “off-the-plan” or community title scheme sales with the responsibility placed on the buyers to investigate any defects and faults in a property.
The regime aims to provide buyers with more information about the property they are buying including its condition, history and potential issues allowing them to make a more informed decision about whether or not to purchase.
Similar disclosure obligations currently exist in states including New South Wales and Victoria.
The new scheme will make it mandatory for a seller of freehold land to disclose relevant information to the buyer in a single document along with any prescribed certificates, including a body corporate certificate, where relevant.
What this will mean is that Sellers will be required to provide various information about their subject property for sale including the property title, planning and zoning, building work, infrastructure proposal, rates and water accounts, body corporation information energy efficiency and environmental issues.
The following documents will be purchased by the seller at their cost:
Property title: shows who owns the property and any registered encumbrances including mortgages or easements.
Planning and zoning: specifies the property planning and zoning status including any planning restrictions such as height or density limits and zoning restrictions.
Building work: provides any building work carried out and whether by an unlicensed person.
Infrastructure proposal: whether a notice, order or transport infrastructure proposal has been issued that may affect the property.
Rates and water: provides information about the property’s rates and water accounts.
Body corporate certificate and community management statement: for properties located within a lot of the community management statement (CMS), providing information about the body corporate together with a copy of the community management statement and any exclusive use by-laws not including in the CMS.
Energy efficiency certificate: for commercial properties, will provide whether the property is energy efficient
Environmental issues: will disclose any written notices required for environmental issues that may impact the property including whether contaminated soil, air or water pollution or any other environmental hazards in the area
The disclosure statement will increase sellers obligations to provide accurate and up-to-date information about their property otherwise this may result in severe penalties including termination of sale.
The proposed disclosure 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 except, for the seller’s statement regarding building work by unlicensed persons;
- Limits imposed by planning laws on the use of the land;
- Services that are or may be connected to the property.
Such disclosure rules will make it easier for home buyers to know more about the property they are buying.
Effect On The Sellers
If the proposed disclosure statement is implemented, it will increase the obligations of sellers who will need to provide accurate and up-to-date information about their property. Penalties for non-compliance can be severe, and can vary from outright termination, to termination on grounds of material prejudice.
Sellers are therefore encouraged to take the time to gather all the necessary information and ensure that it is accurate before placing their property on the market.
As the implementation of the Property Law Bill 2023 draws nearer, it will be interesting to see how these new statutory disclosure requirements will impact the property market.
The scheme will also prominently alert buyers to the need to undertake their own due diligence on flood information, and direct buyers to appropriate resources to access a property’s flood information.
If you wish to discuss your property sale or purchase, contact Legalease Lawyers on 0402 121 124.
