Streamlining property law in Queensland 5 min read
The Property Law Act 2023 (the Act) passed Parliament on 25 October 2023. The Act aims to simplify, streamline and modernise Queensland's property law regime by replacing the Property Law Act 1974 (Qld). The Act proposes both minor and major changes to reflect contemporary commercial practices, repeal outdated and unnecessary provisions, and increase certainty. The commencement date is set by proclamation and may be delayed by up to 12 months to allow for consultation and education, but there has yet to be confirmation.
In this Insight, we focus on some of the key changes to look out for once the Act takes effect. In particular:
- the Act will create a statutory seller disclosure scheme that will apply to all freehold sales of land (but note that where other acts provide for additional disclosure obligations or additional consequences for a failure to disclose, then those acts will continue to apply);
- the Act will provide that covenants in registered easements that relate to the use, ownership or maintenance of the land (regardless of whether the covenants are positive or negative covenants) will be binding on future landowners unless the covenants are expressed to be personal; and
- the limitations period for bringing a claim in respect of a deed will be reduced from 12 years to 6 years.
The proposed statutory disclosure scheme requires the seller to give the buyer a disclosure statement (the form of which will be prescribed by regulation) along with copies of a prescribed list of searches / certificates before the contract is signed. Further, the disclosure statement will contain warnings about information that is not included. A list of prescribed information for a disclosure statement and a list of prescribed certificates is contained in the draft Property Law Regulation 2023.
The seller must disclose the documents to the buyer in physical form or, if the buyer consents, by electronic communication.
Consequences of non-compliance
The Act will provide the buyer with the right to terminate in two circumstances:
- if the seller does not provide disclosure documents, then the buyer may terminate the contract at any time before settlement; or
- if the seller provides disclosure documents that are inaccurate or incomplete in relation to a material matter, then the buyer may terminate if they would not have otherwise signed the contract.
However, if another act provides a remedy for the failure to disclose particular information, then the consequences of that act will apply instead of the statutory seller disclosure scheme termination rights.
Categories of sales excluded from the statutory seller disclosure scheme
The following categories are exempt from the proposed scheme:
- sales between related parties where the buyer waives the requirement;
- sales between co-owners or neighbouring landowners for a boundary realignment;
- court-ordered sales;
- transfers to a personal representative or beneficiary under a will or due to death;
- where contracts arise out of an option and the seller previously made disclosure to the buyer when entering into the option (only where the buyer under the contract for the sale of the lot and the option for the sale of the lot are the same. Where a nominee is being appointed under an option, separate disclosure would need to be made to the nominee before the option is exercised);
- where the sale price is greater than $10 million (including GST) where the buyer waives the requirement;
- where the seller is Brisbane City Council, or another local government, and the sale is to recover overdue rates or charges, and the buyer is given a notice that the seller is not required to provide the disclosure statement and required certificates;
- where the seller is the state and the buyer has been the tenant of the property for at least three years and the buyer is given a notice that the seller is not required to provide the disclosure statement and required certificates; and
- where the buyer is a publicly listed corporation (or a subsidiary of a publicly listed corporation), the state, a statutory body or a constructing authority under the Acquisitions of Land Act 1967 (Qld).
Under the current law, a positive covenant in an easement is not enforceable against successors in title unless the successor agrees to be bound. Section 65 of the Act aims to address this issue. The section operates such that covenants in registered easements that relate to the use, ownership or maintenance of the land (regardless of whether the covenants are positive or negative covenants) will be binding on future landowners unless the covenants are expressed to be personal.
Section 65 will have a retrospective effect. It will apply to all easements, regardless of when the easement was entered into or registered.
Currently, the limitations period for bringing a claim based on a contract is six years, whereas the limitations period for bringing a claim based on a deed is 12 years. The Act proposes to amend the Limitations of Actions Act 1974, in order to reduce the limitations period for deeds to six years to match the limitations period for contracts. Reducing the limitations period will remove one of the primary distinctions and one of the key advantages of using a deed. However, the proposed change will not affect existing deeds.
The Act is a much-needed modernisation of the Property Law Act which should lead to a simpler and more streamlined property law regime in Queensland. Although the Act retains the majority of well-established property law principles, there are some significant changes to the existing law that stakeholders should be aware of.