Seller’s Disclosure Regime Property Law Bill 2023
The Queensland Government is progressing towards implementing the Property Law Bill 2023, an initiative that will introduce a seller disclosure scheme for property transactions in the state. If the bill comes into effect, it will mark a significant shift from the current 'buyer beware' system to a model that obligates property sellers to actively disclose certain information about their properties.
The legislation seeks to bring Queensland in line with states like New South Wales and Victoria, where similar mandates are already in place. However, the bill is yet to receive final parliamentary approval and its commencement date remains uncertain.
Protection for buyers
In essence, the new regime is designed to equip potential property buyers with detailed information about a property's condition, history, and potential problems. This includes insights into planning and zoning restrictions, any unlicensed building work, infrastructure proposals, rates and water accounts, environmental concerns, and body corporate information for community titles scheme lots. For commercial properties, sellers will also need to provide details about energy efficiency certifications. However, the bill does not stipulate the need for information on aspects such as flooding history, structural integrity, pest infestation, or historical use of the property.
What will sellers have to do?
If the legislation is enacted, sellers will need to provide these disclosures to potential buyers before the contract of sale is signed. These disclosure documents should include a disclosure statement, which captures all prescribed information in a government-approved format, as well as any prescribed certificates applicable to the property. This change in regulation will affect not only residential properties but also commercial, agricultural, industrial, and other types of freehold property. A copy of the currently proposed draft can be found here.
Some exceptions are noted in the proposed legislation. For example, the new disclosure requirements may not apply in scenarios involving related parties, property transactions exceeding $10 million GST inclusive, or when the buyer is a government entity or listed corporation.
Termination rights
Buyers can terminate the sale contract if the seller fails to provide a disclosure statement or if the provided documents are inaccurate or incomplete concerning material matters. However, such termination rights can be waived by the buyer under specific circumstances.
Penalties for non-compliance
On the seller's side, the enhanced obligations to disclose accurate and comprehensive information about their property could lead to stricter penalties for non-compliance, ranging from outright contract termination to termination on grounds of material prejudice. Sellers are therefore advised to carefully compile all the necessary information and confirm its accuracy before listing their property for sale.
Impact on the property market
As Queensland edges closer to implementing the Property Law Bill 2023, it remains to be seen how this new regime of statutory disclosure requirements will reshape the property market. The implications of these changes will likely be profound, both for property sellers burdened with new responsibilities and for buyers set to benefit from a wealth of information that aids their purchasing decisions.
At Bradley & Bray, we will endeavour to keep you up to date with timeframes for implementation and relevant changes to the suggested application of this new Bill.
This article is general in nature and does not constitute legal advice. If you require legal advice in relation to your personal circumstances, you must formally engage our firm, or another firm to provide legal advice in relation to your matter. Bradley & Bray Lawyers takes no responsibility for any use of the information provided in this article.
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