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5 December 2012

It is nearly thirty years since the Land Sales Act 1984 (the Act) came into force.  There have been some minor amendments made over the years, but the Queensland Government is now conducting a full review.  The expectation is that a Bill will be introduced sometime in 2013.

The Act originally came about to protect consumers buying proposed allotments (i.e. unregistered flat land lots) and proposed lots (i.e. unregistered building units).  A number of problems had  been experienced by buyers in the years leading up to the Act being introduced as a result of mis-descriptions made by developers.  For example, off the plan sales at Russell Island received high media attention at the time.

A reference committee has been established which is currently in public consultation mode.  Some aspects of the Act which are being examined for possible change include:

  • The removal of the restriction which prevents a developer from entering into a contract to sell a proposed allotment before a development permit is obtained (regardless of whether operational works are required or not). This would potentially allow developers to get pre-sales in place at an earlier stage, although there may be some commercial risk of doing so.
  • A review of the disclosure requirements for proposed allotments. For example, terminology may be modernised. Also, the information required in the disclosure plan may be expanded to include proposed interests affecting the allotment, such as easements and covenants. Certification of the disclosure plan by a registered cadastral surveyor is also being considered.
  • What constitutes a "significant variation" (entitling a buyer to cancel the contract) is also being reviewed so the relevant thresholds for acceptable change may vary, depending on the size of the allotment. Also, changes to proposed interests which affect the allotment, such as easements, covenants or the location of services may be included in the concept of "significant variation". It is also being mooted that the buyer will only be entitled to cancel a contract for a significant variation if it can demonstrate "material prejudice".
  • The review is also considering a restructure of the provisions relating to proposed lots (i.e. unregistered building units). There is a compelling argument to align these requirements with the disclosure regime contained in the Body Corporate and Community Management Act 1997, to simplify the law for developers and buyers alike.
  • The provisions relating to deposits are also being examined to better accommodate the now common use of deposit bonds and bank guarantees and to re-consider the current limitation of the amount of deposit to 10%.

There is much change afoot for developers in Queensland over the coming year.  The Sustainable Planning and Other Legislation Amendment Bill 2012 was passed last month.  More changes are proposed to the Property Agents and Motor Dealers Act 2000.  This review of the Land Sales Act 1984 will also require attention within the development industry once a Bill is finalised and becomes  law.  Roll on 2013!

For further information, please contact:

Rebecca Castley | Partner
Mullins Lawyers
t +61 7 3224 0211
f +61 7 3224 0333

Anthony O'Dwyer | Partner
Mullins Lawyers
t +61 7 3224 0220
f +61 7 3224 0333 

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