Client Update: Proposed amendments to Queensland's Land Sales Act
15 October 2012
In brief: In important news for developers and financiers, a recently released consultation paper related to the Land Sales Act 1984 (Qld), seeks feedback on amendments to, among other things, the limitations of contract deposits to a specific percentage of the purchase price. Partner Tony Davies (view CV) reports.
The Queensland Department of Justice and Attorney-General has just released a consultation paper seeking feedback on amendments to the Land Sales Act 1984 (Qld). Significantly the paper also seeks feedback on the provisions the Property Law Act 1974 (Qld) which effectively limit contract deposits to 10 per cent of the purchase price (failing which, such contracts become instalment contracts with adverse consequences for sellers).
The Land Sales Act deals with the sale of land (both strata and non-strata) that is off the plan, ie. does not have a current title. It has been in place since 1984 and many of its provisions no longer 'fit' with current land transactions. In particular, much of the terminology in the Act is out of date. For example, the terms vendor, purchaser, sell and purchase are not consistently defined.
Also, the expression 'enters upon a purchase' used in the Act, was determined to mean, in effect, when a buyer signs a contract of sale (see Three Pty Ltd v Body Corporate for Savoir Faire CTS). This decision was a surprise to everyone, but highlighted the uncertainty caused by the use of out-of-date expressions.
Buyers have frequently used this uncertainty as a basis for seeking to avoid settlement of contract of sales.
The Land Sales Act specifically provides that, in regard to a sale off the plan of non-strata land, the deposit must not exceed 10 per cent of the purchase price. The consultation paper raises the possibility of removing that limitation. However, significantly, the paper also raises the possibility of amending the Property Law Act provisions that, in effect, limit the deposit to 10 per cent in regard to all contracts. Proposals 18 and 19 in the paper go into some detail regarding the consequences of the instalment contract provisions of the Property Law Act. The paper seeks comment on those provisions and, in particular, whether they should be amended to allow for higher deposits eg 20 or 30 per cent. We have received strong feedback from developers, and financiers that removal of the arbitrary 10 per cent deposit limit could have a significant positive effect on their ability to get developments off the ground.
Feedback on the consultation paper is due by 5pm Friday 30th November, 2012. We encourage developers to consider making submissions and are happy to assist with those.
- Tony DaviesPartner,
Ph: +61 7 3334 3250
- John BeckinsalePartner,
Ph: +61 7 3334 3520
- Mark StubbingsPartner, Sector Leader - Real Estate,
Ph: +61 2 9230 4257
- Nicholas CowiePartner,
Ph: +61 2 9230 4025
- Victoria HolthousePartner,
Ph: +61 2 9230 4303
- Michael GravesPartner,
Ph: +61 3 9613 8814
- David McLeishPartner,
Ph: +61 3 9613 8954
- Paul NewmanPartner,
Ph: +61 7 3334 3514