Say hello to the new QLD Property Law Act 2023
On 25 October 2023, the Property Law Act 2023 (the Act) was passed in Queensland Parliament and received royal assent on 2 November 2023. The Act is aimed to align with the regulations of other Australian states and modernise the Queensland’s property law regime as it has been in effect for nearly five decades. The commencement date of the Act waits for an official proclamation.
The key changes to look out for once the Act takes effect, is in particular:
The introduction of a statutory seller disclosure scheme (Seller Disclosure Scheme);
Rules relating to leases will be updated, introducing additional protections for current and former tenants; and
Limitation period for actions brought based on a deed is reduced from 12 years to 6 years.
Statutory Seller Disclosure Scheme
The statutory Seller Disclosure Scheme will be applicable to sales of all freehold land, including sales by auction and by option, subject to several exemptions. The objective of the Seller Disclosure Scheme is to bring consistency and transparency to property sales by making it mandatory for a seller of freehold land to disclose relevant information to a buyer.
Sellers will now be required to provide the buyer with a disclosure statement and any prescribed certificates (the Disclosure Documents) pertaining to the subject property. The Disclosure Statement needs to be in the approved form, include all information prescribed by regulation, be completed with information that is true at the time it is given to the buyer, and be signed by the seller. Prescribed certificates are to include any certificates applicable to the property, such as title search, registered plan, current notices and a pool compliance certificate (if applicable) and also includes information prescribed by the Property Law Regulation 2023.
In relation to sales arising from the exercise of an option, the seller is obliged to give a disclosure statement to the buyer prior to the buyer signing the option.
The Seller Disclosure Scheme gives the buyer the right to terminate the contract for sale at any time before settlement if the seller fails to provide any of the Disclosure Documents at the relevant time or provides a Disclosure Statement or Disclosure Document that is inaccurate or incomplete pertaining to the property and the buyer was not aware and would not have entered into the contract if it had known of the true position. Where a buyer terminates a contract for sale, the seller must refund to the buyer any amount that the buyer has paid towards the purchase within 14 days of termination.
Buyers should still undertake their own due diligence in relation to matters that are not covered by the Disclosure Documents, for example matters relating to flood history, building and pest issues and development approvals.
The exemptions to the Seller Disclosure Scheme include sales between related parties where the buyer waives the requirements, court ordered sales, transfers to a personal representative or beneficiary under a will or due to a death, and sales between co-owners or boundary realignment between neighbouring properties.
Leases for commercial premises
Assignment and sublease of leases
Where a tenant requests consent from the landlord to deal with their lease, including to assign or sublet their lease to another party, the landlord has a month from receipt of all relevant information to notify the tenant of its decision (however this timeframe can be extended by agreement). The landlord must also provide the tenant with reasons for refusal of consent or any conditions imposed on the dealing. A tenant has a right to apply to the court for damages where the landlord fails to provide its decision regarding consent or the tenant believes that the landlord has unreasonably withheld consent or a condition attached to the consent is unreasonable.
Subject to any agreement to the contrary, if a lease is assigned by a tenant, the assignee of a lease is bound by the terms of the lease and is entitled to the benefit of each term to the extent that the tenant was before the assignment. This does not apply if the lease expressly states that the term is personal to a tenant or where the parties agree that the term will remain with the tenant.
Additionally, the new regime provides that if a tenant assigns a lease to a third party and that party then assigns the lease to another person, the tenant and any guarantor is released from any liability to the landlord for a breach by that other person.
Breach of Lease
The requirement of a landlord to serve a notice to remedy a breach on a tenant, to re-enter or forfeit a lease for a breach of term, has been updated. The changes require a copy of the notice to be served on a designated person (which include mortgagees, receivers, guarantors, and subtenants). These designated persons are also given rights to make a court application to seek relief from forfeiture.
The landlord no longer needs to serve a notice to remedy breach where the landlord reasonably believes that the tenant has given up possession of the premises.
Lease Renewals
Procedural changes have been made to the process relating to how a landlord can refuse a tenant’s exercise of option to extend or renew their lease if the tenant is in breach of the lease.
Additionally, where are breach of the lease occurs after the notice of an exercise of option is given by the tenant to the landlord, the landlord is still required to provide a further prescribed notice before the landlord can refuse the tenant’s option based on the subsequent breach.
The provision does not entitle a tenant to relief where the tenant does not exercise the option within the requisite time stated under the lease.
Reduction to the Limitations Period of Deeds
Currently the limitation period for actions based on a deed will be reduced from 12 years to 6 years. This will match the limitations period for contracts. For context, in some other Australian jurisdictions, the limitation period for actions based on deeds is 15 years. This means that anyone that is party to a deed will have a significantly shorter time to bring action against another party for a breach of deed.
The proposed changes to property law in Queensland are intended to create a more streamlined regime. For more personalised advice on navigating these changes and how they may impact you, please contact our people.
Ron Zucker 0410 590 111
Eollyn Cortes 0478 727 395
Sagang Chung 0431 435 333
Julia Zou 0426 670 202
