Article Summary
Queensland’s Property Law Act 2023 introduced a mandatory Seller Disclosure regime from 1 August 2024. Six months in, conveyancing costs have increased, compliance risks remain, and sellers must ensure disclosure statements are accurate before entering a contract.
Queensland’s “new” Property Law Act has now been in operation for 6 months. Given the anxiety in the lead up to the commencement of the Act, we thought it timely to share our thoughts on the first 6 months of operation, and consider whether everyone’s worst fears about the new Act have been realised.
Far and away the greatest concern was focused on the new Seller Disclosure regime, which was a new concept in Queensland. Early on, there were certainly some teething problems, including:
- Delays in obtaining the necessary body corporate certificates, as some body corporates were unsure of the extent of their disclosure obligations and had to seek advice of their own;
- Body corporate managers complained that the fee they are permitted charge (set by the legislation) for producing the certificate isn’t nearly sufficient to cover their costs of doing so;
- Difficulties locating the information necessary to complete the statements, particularly as different local Councils make different information available in different ways. There were also some instances of some Council mapping services being unavailable;
- Delays while Sellers waited on other search results required to inform the content of the Seller Disclosure Statement;
- Sellers failing to disclose encumbrances in the correct section of the Form 2; and
- Third party providers of Seller Disclosure Statements providing incorrect Statements, despite their clients giving accurate instructions. If a third party provider does prepare an incorrect Statement and it is given to a Buyer, the Buyer’s right to terminate will be the same as if the Seller had prepared the Statement. Sellers are still ultimately responsible for ensuring that their Statement is accurate at the time it is given.
It still appears that there is some uncertainty around the extent of the information required to be disclosed, particularly when it comes to statutory encumbrances, and the extent of the “prescribed certificates” or documents required to be provided as part of the Disclosure. Sellers are tending to “over-disclose”, providing documents that are not required, which is resulting in increased cost for Buyers as they sift through hundreds of pages of irrelevant information.
One of the main complaints about the Seller Disclosure Statement was that it would increase the cost of conveyancing for both Sellers and Buyers. There is no denying that the Seller Disclosure Regime has introduced new complications for both Sellers and Buyers and as such, the cost of conveyancing transactions has indeed increased for both parties.
On the plus side, the delays in obtaining body corporate certificates have largely been resolved, and all parties to conveyancing transactions are becoming more familiar with the process for the collection of information required to complete the Seller Disclosure Statement and the need to give the Statement before a Contract can be entered into.
Prior to 1 August, it was anticipated that real estate agents would prepare Seller Disclosure Statements for their Seller clients. However, our experience has almost universally been that real estate agents have been asking Sellers to have their lawyers prepare the Seller Disclosure Statements while the agent is preparing the property for sale.
If you have questions about the Seller Disclosure regime or you are considering listing your property for sale, talk to our Property + Business Transactions team early, to ensure that you’re prepared and ready to proceed to contract once a Buyer is found.
For further information on this alert, contact Director Carly Brailak.
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