Property News Alert: Proposed changes to land sales in Queensland
The Attorney General has recently introduced into Parliament the Land Sales and Other Legislation Amendment Bill 2014 (the Bill). The stated aim of the Bill is to streamline and modernise the land sales legislation whilst ensuring that the appropriate consumer protections remain in place. A summary of some of the main changes are:
- The Bill proposes to consolidate the disclosure requirements in the Body Corporate and Community Management Act 1997 (Qld) (the BCCM). Currently they are contained in various pieces of legislation. There are also clarifications made to the information required to be disclosed in the disclosure plan and disclosure statement.
- The time frame to vary or correct a disclosure statement or disclosure plan will change to 21 days before completion of the sale (rather than within 14 days after the seller becomes aware of the variation or inaccuracy).
- The sunset date provisions for the sale of proposed lots under the BCCM are to be amended. Currently, a statutory regulation must be passed in order for the three and a half year sunset date to be extended. The proposed amendments will allow sellers and buyers to increase that time period to anywhere up to five and a half years by noting so in the contract. If no time period is provided for in the contract, the default sunset date will be three and a half years.
- The Bill provides useful clarification as to what is required in disclosure plans and statements.
- The requirement that approval of the reconfiguration and operational works approval must be obtained from council before the sale of unregistered, reconfigured parcels of land is to be removed. This is likely to assist developers to secure finance for projects by allowing pre-sales.
- The Land Sales Act 1984 (Qld) will not apply to large transactions (one sale of six or more proposed lots) or where the land is not being subdivided into more than five lots. The current requirement to apply for an exemption will be removed.
Increased deposits proposed for ‘off the plan’ sales
The Bill proposes to amend the Property Law Act 1974 (Qld) in respect of ‘off-the-plan’ sales so that the contract can require payment of a deposit up to 20% of the purchase price without the contract becoming an instalment contract. Previously any deposit above 10% would cause the contract to be an instalment contract. If the seller properly terminates the contract for breach by the buyer, the seller will be entitled to retain the deposit of 20%. Under the existing law, the seller would only be entitled to retain 10% plus any amount of losses that it could prove it incurred.
Release of disputed deposits
The Bill also proposes important changes in respect of law firms and agents holding deposits. Under the existing law, where a purchaser disputes a deposit held by a law firm or agent, it will usually be necessary for the law firm or agent to hold the deposit until the dispute is resolved (usually by litigation). Sometimes the amount of the deposit will make litigation more costly than the deposit amount. The Bill creates a new procedure whereby if the law practice or agent reasonably believes that the vendor or the purchaser is entitled to the deposit, it can give the parties a 60 day notice indicating that it proposes to disburse the moneys to one of the vendor or the purchase (as the case may be). At the end of the 60 day period, the law firm or agent may disburse the deposit in accordance with the notice, unless one of the parties has commenced proceedings in respect of the deposit or the parties have agreed as to how the deposit ought to be disbursed.
Status of the Bill
The draft legislation is now with the committee for review before it will receive its second reading speech. We will keep you informed about the progress of the Bill and any changes to it.
For further information, please contact Lynette Reynolds.
Lynette Reynolds, Partner