Changes to the Sale of Land Disclosure Requirements in Queensland. Is it really Buyer beware?

Are changes to the sale of land disclosure requirements in Queensland shifting the burden from buyer beware? 

Caveat Emptor or ‘Buyer Beware’ is a real estate concept where the buyer takes on the risk of the property not meeting their expectations or having defects. In Queensland, buyers are responsible for conducting thorough due diligence investigations before committing to a sale, while sellers' disclosure obligations are relatively limited.

However, the Property Law Bill 2023 (QLD) (Bill) proposes to overhaul this process by placing more responsibility on sellers to provide pre-contract disclosure and giving buyers grounds to terminate or claim damages from sellers in some circumstances.

Currently, purchasers are discouraged from signing a contract of sale unless it has a 14-day due diligence period, during which they can investigate the property. Investigations may include obtaining flood level reports, body corporate reports, pest and building inspections, rates notices, or contaminated land searches. Those reports or searches might show that the property is not suitable for the purchasers intended use and a purchaser then has the option to terminate the contract under the due diligence special condition and have their deposit returned.

If passed, the Bill will introduce significant changes to the Queensland property industry, including a new seller disclosure regime that requires a seller to give a buyer a disclosure statement for each lot before a contract is signed. The statement must be completed in the approved form, include prescribed information (which is yet to be released), be true at the time of signing, and be signed by the seller. 

The Bill also requires the seller to disclose any defects to the title in the contract, and if not disclosed, the buyer will, in some circumstances, be entitled to recover their deposit and will be relieved of all liability under the contract.

A draft Seller Disclosure Statement was issued in the drafting phase. It outlines the potential disclosure requirements, including providing or attaching:

1. details of any encumbrances over the lot;

2. notices, orders or transport infrastructure issued to the seller;

3. title search and registered survey plan;

4. body corporate or community management statements;

5. a pool compliance certificate;

6. tree application or orders;

7. environmental protection notices;

8. unlicensed building work notices; or

9. rates and water services notices.

The implementation of the disclosure regime is a welcome change to the current due diligence process, allowing buyers to eliminate unsuitable properties without incurring unnecessary and costly due diligence inquiries for every lot. Landowners looking to sell their properties in Queensland should keep up to date on the status of the Bill and ensure that their contracts comply with the new disclosure obligations.

Further Information:

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DISCLAIMER:

The information in this article is of a general nature. It does not constitute formal legal advice, and should not be relied on as such. If you are seeking legal advice about a specific matter please contact us to discuss.