Property contracts and agents obligations are about to change dramatically due to the commencement of some key pieces of legislation on 1 December 2014. Take a look at the following points and call me if you need help!
- Land Sales Act and Body Corporate Community Management Act
The amendments to these acts will commence on 1 December 2014, the Land Sales amendments make significant changes to disclosure requirements to off-the-plan land sales contracts and the Community Titles Scheme that goes with them. It is important to check that the contract is signed by both parties and the buyer is notified from the commencement date of the new disclosure documents and form of Contract.
It is important to anyone who sells off-the-plan to be aware of the following:-
- The amount of the deposit for off-the-plan lots can be up to 20% of the purchase price (Section 68a of the Property Law Act).
- There are new requirements for Disclosure Plan (Section 213aa BCCMA and Section 11LSA).
- There will be varied requirements for Disclosure Statements.
- Time frames for provision of a further statement varying the Disclosure Statement, changed to 21 days before the Contract is settled (Section 214 BCCMA and Section 13LSA).
- An off-the-plan Contract for a proposed Community Titles Scheme Lot may then allow for a Sunset Date, for settlement up to 5 ½ years after the buyer enters into the contract (Section 217DBCCMA).
These are very significant if you are either buying or selling units and investors should check carefully exactly the requirements before signing a contract. Some of the existing contract prepared prior to these changes will not comply. Failure to comply after commencement can give a buyer termination rights. As an example the seller must provide a cadastral (detailed) survey of the lot prior to signing the contract and if they don’t the buyer can terminate the contract. The key date is the date it was executed as it must be prior to commencement of the act.
- Property Occupations Act transitioned from Property Agents and Motor Dealers Act
The attorney General in Queensland has announced that the changes will commence on 1 December 2014. In simple terms:-
- PAMDA will apply to all contract for the sale of residential property which exist prior to 1 December 2014; and
- The new POA will apply to all contracts for the sale of property intended to be used for residential purchases entered into on or after 1 December 2014.
There are some transitional provisions. Any rights for termination for contracts entered into prior to 1 December 2014 will continue to be subject to PAMDA requirements. Confused yet?
The changes of legislation mean that the preparation and advice for residential property are different:-
- The new REIQ Contracts must be used as at 1 December 2014;
- Agents and Lawyers do not have to affix the PAMDA Form 30c Warning Statement or the BCCM Form 14 Information Statement (for units) to Contracts and give statements directing the attention to these documents and the Contract;
- All contracts must ensure that they include a statement regarding a cooling off period immediately above the space where the buyer signs the Contract for sale of residential property (POA Section 165).
Every contract has to be checked to make sure the commencement date does not affect a signed Contract regardless of when it was prepared. Given the potential for confusion it is important to check this with a legal advisor BEFORE SIGNING.
- Environmental Protection Act Changes
There were changes to the EPA passed on 28 October 2014, which affect all contracts for sale existing as at that date.
- Notice given to all buyers pre contract under Section 421 is now in a different section.
- There is a new opportunity to correct pre contract disclosure problems where an owner can give the relevant notice after providing the buyer with 21 days to rescind the contract, following which the buyers right to rescind the contract is waived. If you are a seller it is really important to know the buyer will have the right to rescind the contract within that time frame for failing to disclose and when acting for buyers they must be aware if they don’t exercise their right to rescind within 21 days then there are serious consequences.
Once again it is important in context of any residential contracts to seek advice and make sure these changes are adequately covered.
There is nothing more certain than change and we certainly recommend that you talk to us before committing yourself to what is usually a very significant financial investment.