Key changes to the Property Law Act 2023

In this Knowledge, we focus on some of the key changes to look out for once the Act comes into force. In particular:

• the Act will create a statutory seller disclosure scheme which will apply to all freehold land sales (but note that where other laws provide for additional disclosure obligations or additional consequences for non-disclosure, those laws will still apply);
• The Act will provide that covenants in registered easements that relate to the use, ownership or maintenance of land (regardless of whether the covenants are positive or negative) will be binding on future landowners unless the covenants are expressed as personal; and
• The statute of limitations for filing a title claim will be reduced from 12 years to 6 years.

The proposed statutory disclosure scheme requires the seller to provide the buyer with a disclosure statement (the form of which will be prescribed by regulation) together with copies of a prescribed list of searches/certificates before signing the contract. Additionally, the disclosure statement will contain warnings about information that is not included. The draft contains a list of prescribed information for a disclosure statement and a list of prescribed certificates. Property Law Regulations 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 Law will grant the buyer the right to cancel in two circumstances:

• if the seller does not provide disclosure documents, the buyer may terminate the contract at any time before settlement; either
• If the seller provides disclosure documents that are inaccurate or incomplete regarding a material matter, then the buyer may terminate the contract if he or she would not have otherwise signed the contract.

However, if another law provides a remedy for failure to disclose particular information, then the consequences of that law will apply rather than the seller's statutory disclosure scheme termination rights.

Sales categories excluded from the legal seller disclosure system

The following categories are exempt from the proposed regime:

• sales between related parties where the buyer waives the requirement;
• sales between co-owners or neighboring landowners for a boundary realignment;
• sales by court order;
• transfers to a personal representative or beneficiary under will or upon death;
• when contracts arise from an option and the seller previously made the disclosure to the buyer when entering into the option (only when the buyer under the contract for the sale of the lot and the option for the sale of the lot are the same. When a Yes the candidate is being appointed under an option, you would need to be informed separately before the option is exercised);
• where the sales price is greater than $10 million (including GST), where the buyer waives the requirement;
• where the seller is Brisbane City Council or other local government, and the sale is to recover overdue fees or charges, and the buyer is notified that the seller is not required to provide the required disclosure statement or certificates;
• when the seller is the State and the buyer has been a tenant of the property for at least three years and the buyer is notified that he or she is not required to provide the required disclosure statement or certificates; and
• where the buyer is a listed corporation (or a subsidiary of a listed corporation), the state, a statutory body or a building authority under the Land Acquisitions Act 1967 (QLD).

Under current law, a positive covenant in an easement is not enforceable against successors in title unless the successor agrees to be bound. Article 65 of the law aims to address this issue. The section operates so that covenants in registered easements that relate to the use, ownership or maintenance of land (regardless of whether the covenants are positive or negative) will be binding on future landowners unless the covenants are expressed as personal.

Article 65 will have retroactive effect. It will apply to all easements, regardless of when the easement was created or registered.

Currently, the statute of limitations for filing a claim based on a contract is six years, while the statute of limitations for filing a claim based on a deed is 12 years. The law proposes to modify the Stock Limitations Act of 1974, in order to reduce the limitation period for deeds to six years to equal that of contracts. Reducing the limitation period will eliminate one of the main distinctions and one of the key advantages of using a deed. However, the proposed change will not affect existing deeds.

The Law is a much-needed modernization of the Property Right Law which should lead to a simpler and more streamlined property law regime in Queensland. Although the Act retains most of the well-established principles of property law, there are some significant changes to existing law that interested parties should be aware of.