Client Update: Developers gain time in Queensland
17 October 2011
In brief: Developers will be able to extend a statutory sunset period for off-the-plan strata contracts without recourse to the current regulatory process under new amending legislation recently introduced into the Queensland Parliament. Senior Associate Annabelle Aland and Lawyer Mark Steele explain.
Currently, section 27 of the Land Sales Act 1984 (Qld) (the Act) allows a purchaser of a proposed lot (ie a strata lot) to avoid a contract of sale if they do not receive a registrable instrument of transfer within three and a half years after the date of the contract of sale the statutory sunset period. Also under the current regime, developers have the ability to apply for an extension of the statutory sunset period to a maximum five and a half years. However, any extension must be prescribed in a regulation and this can often be a time consuming, and consequently, costly process.
A developer only has the benefit of a prescribed extension period if they give the buyer a notice in the approved form (Form 1) stating the period prescribed by the regulation, before the buyer enters into a contract to purchase the proposed lot.
The Criminal and Other Legislation Amendment Bill 2011 (the Bill) was introduced to the Queensland Parliament on 13 October 2011 to amend the Act. The amendment means the current ss 27 and 28 of the Act are replaced with a new s27. The new section allows a developer to specify in the contract of sale the time, up to a maximum of five and a half years after the date of the contract of sale, that a registrable instrument of transfer must be given to a buyer. If no time is specified in the contract of sale, a default period of three and a half years will apply. The obligation to have an extension prescribed by regulation and to give a notice of the extension in the approved form to the buyer has been removed.
In circumstances where the developer needs a longer period within which to give the buyer a registrable instrument of transfer (but no more than five and a half years after the date of the contract of sale), the developer merely has to provide for that in the contract of sale.
This is a big 'win'. In our experience the time taken to have a regulation made could be six to eight months. This meant that, as developers could not market strata lots until the regulation was made, sales programs would be significantly delayed. The streamlined process creates a time and cost saving for developers.
Developers should be aware that new amendments will commence on a date to be fixed by proclamation and that the new provisions will apply to all contracts entered into after that date. Accordingly, developers should be reviewing their off-the-plan contracts now in anticipation of the Bill becoming law.
- Paul NewmanPartner,
Ph: +61 7 3334 3514
- John BeckinsalePartner,
Ph: +61 7 3334 3520
- Victoria HolthousePartner,
Ph: +61 2 9230 4303
- Nicholas CowiePartner,
Ph: +61 2 9230 4025
- Mark StubbingsPartner, Sector Leader, Real Estate,
Ph: +61 2 9230 4257
- Michael GravesPartner,
Ph: +61 3 9613 8814
- David McLeishPartner,
Ph: +61 3 9613 8954
- Chris SchulzPartner,
Ph: +61 3 9613 8772
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