Part 7 Division 4 of the PLA imposes new disclosure obligations on sellers in Queensland. These measures are designed to increase the transparency of the conveyancing process for buyers.
What do the changes mean for sellers?
Under the PLA, prior to a contract of sale being signed, sellers will be required to provide buyers with a disclosure statement and certain prescribed documents. Among other things, the disclosure statement must include information about:
- Unregistered encumbrances (e.g. leases, easements, restrictive covenants) affecting the property;
- Whether there is a pool on the property;
- Whether the property is part of a community titles scheme (strata title);
- Tree dispute applications;
- Whether the property is recorded on the environmental management or contaminated land registers;
- Whether the property is affected by a notice of intention of resumption;
- Zoning and heritage information; and
- Council and water rates payable
Prescribed documents which must be provided to the buyer include:
- A title search;
- A copy of the registered plan of survey for the property;
- Where applicable, a pool compliance certificate; and
- Where applicable, a community management statement and body corporate certificate.
In certain circumstances, a seller will be exempt from the above obligations. This includes:
- Where the buyer and seller are related, and the buyer has provided notice waiving compliance with the above obligations. Where there are multiple buyers or sellers, all buyers and sellers must be related;
- Where the buyer is a government body; and
- Where the buyer is a listed corporation
What happens if a seller fails to comply?
If a seller fails to comply with any of the above disclosure obligations, the buyer will be entitled to terminate the contract at any time before settlement, upon the giving of notice.
If the buyer so terminates, the seller must repay all purchase moneys to the buyer or the buyer’s agent within 14 days, along with any interest accrued on that amount.
What do the changes mean for buyers?
While the new disclosure obligations imposed on sellers represent an increased level of protection for buyers, they are not all-encompassing. Sellers are specifically not required to make disclosures on certain matters, including:
- Flooding and natural hazard history;
- Structural defects or pest infestations; and
- Limits imposed by planning laws on the use of the land.
Buyers must therefore still conduct their own due diligence on these important matters prior to purchasing
Key Takeaways
The new PLA imposes significant disclosure on obligations on sellers of property in Queensland, the breach of which may cause the sale to fall through. Sellers and their solicitors are therefore advised to treat such obligations as serious matters, rather than mere administrative inconveniences.
On the other hand, buyers are advised to not grow complacent with the implementation of these new measures, and to always conduct their own due diligence prior to purchasing a property.
Disclaimer:
This article provides general information only and should not be construed as legal advice. The content aims to offer a broad understanding of the topic and should not be assumed to be applicable to your individual circumstances. Should you require our assistance please contact us here.