The introduction of the Property Occupations Act 2014 (Qld) (the Act) on 1 December 2014, was seen as a means for simplifying the process for licensing and appointing real estate agents, regulating price guides, and for the purposes of this piece, the formation of residential contracts in Queensland.
The Queensland government’s attempts in trying to simplify the land transaction process can be seen in the definition of residential property in s 21 of the Act, which states “real property that is used, or is intended to be used, for residential purposes but does not include real property that is used primarily for the purposes of industry, commerce or primary production.”
Relevant contract and new exemptions
Section 160 of the Act lists a number of exemptions of a relevant contract that includes the following:
(i) a contract formed on a sale by auction; or
(ii) a contract entered into, by no later than 5p.m. on the second clear business day after the property was passed in at auction, with a registered bidder for the auction; or
(iii) a contract (a later contract) formed because of the exercise of an option granted under an earlier contract, if the parties to the later contract are the same as the parties to the earlier contract; or
(iv) a contract if the buyer is a publicly listed corporation or a subsidiary of a publicly listed corporation; or
(v) a contract if the buyer is the State or a statutory body; or
(vi) a contract if the buyer is purchasing at least 3 lots at the same time, whether or not in the 1 contract.
The section provides certainty in relation to whether a contract arises out of the exercise of an option, is a relevant contract. Also, contracts entered into with a nominee of the grantee under the option will be considered as a relevant contract in relation to the applicable provisions.
Warning statement no longer necessary for relevant contract
For a relevant contract, the requirement of having a warning statement or a Body Corporate and Community Management Act 1997 (Qld) (BCCMA) Form 14 information sheet attached to the relevant contract is no longer required. In its place, s 165(2) of the Act states the seller must ensure that the proposed relevant contract must include immediately above the area where the purchaser must sign, and on the same page, a written warning that includes the following words or words to like effect:
“The contract may be subject to a 5 business day statutory cooling-off period. A termination penalty of 0.25% of the purchase price applies if the buyer terminates the contract during the statutory cooling-off period. It is recommended the buyer obtain an independent property valuation and independent legal advice about the contract and his or her cooling-off rights, before signing.”
Cooling off rights and the Property Occupations Act
The Act no longer requires a lawyer’s certificate when waiving or shortening the cooling off period, but rather, a purchaser is able to waive the cooling off period by written notice provided to a seller. Additionally, there is no prescribed notice period, and as a consequence, notice may be given before or after a contract is entered into. Additionally, there is also no longer a requirement for a purchaser to be provided with an independent solicitor’s certificate. Although, the common law duty to disclose conflicts of interest still remains.
Buyers now have to make their own inquiries in relation to constructing a residence
Section 149 of the Property Agents and Motor Dealers Act,previously required a real estate agent to provide notice if a person is prevented from constructing a residence on land being sold. However, with the introduction of the Act, the requirement to provide notice by a real estate agent is no longer there, and as a consequence, a purchaser must now make their own inquiries to ensure a residence can be constructed.
The introduction of the Act has made some aspects of the land transaction process more efficient by reducing the number of disclosure requirements, and the forms used, which has led to a reduction in disputes in relation to the enforceability of contracts. It’s a positive step forward for all parties in providing a more efficient process to land transactions.
This article or the information contained therein does not purport to provide a full explanation of the law, give advice or any guidance to anyone in connection with the Property Occupation Act or any other issue and this article is not to be used by anyone to support their legal position or otherwise. For clarification purposes and further to the above this article does not purport to be advice in any regard. This firm cannot take responsibility for any action readers take based on this information. We would be happy to assist you with any property, real estate, development, building, construction and engineering related legal issues you may have, please get in touch via firstname.lastname@example.org or telephone our Brisbane office on (07) 3087 3463, Sydney office on (02) 9293 2546 or Sunshine Coast office on (07) 5413 9270 and one of our experienced lawyers will respond to you.