If you’re in the real estate industry, are an investor or simply own a property, then property law matters. It governs the contracts you make, puts requirements and processes in place for buying and selling property and even sets the treatment for easements and covenants.
But property law is set to have a big revamp with the current Property Law Act 1974 (QLD) (the Current Act) being replaced by legislation arriving that’s been approved under the Property Law Bill 2023. And that means that there will be some big challenges and opportunities for you to navigate in the property space.
Introducing the Property Law Bill 2023
The Property Law Bill 2023 (the Property Law Bill 2023) introduces significant reforms that are designed to modernise Queensland’s property laws and prepare for the future, including to better facilitate e-conveyancing and electronic transactions. The bill was passed on the 25th of October 2023, and received Royal Assent on 7 November 2023. Its commencement is expected very soon (to be announced via proclamation).
This new will completely replace the Current Act, but also consolidate and amend laws that are currently covered by the Body Corporate and Community Management Act 1997, the Building Units and Group Titles Act 1980, the Land Title Act 1994, the Limitation of Actions Act 1974, the Property Occupations Act 2014 and others.
With such a wide impact, it’s likely that the Property Law Bill 2023, when passed into law, will have an effect on most stakeholders in the property space. So here’s what you need to know about the reforms and how they might impact you.
In This Article:
Key Changes from the Property Law Bill 2023
Sales of land
One of the first areas of reform under the new bill is around sales of land.
- Mandatory seller disclosure regime. Under the new reforms, sellers are required to provide comprehensive property information to potential buyers. This is a significant change because unlike some other Australian jurisdictions, Queensland does not currently require any formal seller disclosure under the Current Act. In fact, it has historically been up to the buyer to investigate the property before committing to the purchase. There have, however, been some requirements under other areas of the law, such as common law or via contract.
The new legislation requires a more transparent process for buyers. It does this by combining all of the common law, statutory and contractual seller disclosure requirements into a single seller disclosure scheme set out in the legislation. This consolidated legislation enhances transparency, reduces the risk of post-sale disputes and makes the process more streamlined overall. - Narrower definition of instalment contracts. The Property Law Bill 2023 has changed the definition of ‘instalment contracts’. A contract for the sale of land is now considered to be an instalment contract if the deposit under the contract exceeds 10% of the purchase price. By refining this definition, the new legislation now provides clearer guidelines on these types of contracts.
- Indemnities in writing. The new bill seeks to formalise indemnity agreements by requiring that all indemnities be in writing. This will provide parties greater legal certainty and ensure that contracts are more easily enforceable.
Leases
- Enforceability of all covenants. The Property Law Bill 2023 simplifies and clarifies the enforceability of covenants under a lease, in particular after a party to the lease has changed (perhaps because the original tenant assigned the lease to someone else, for example). The new bill makes the covenants in leases enforceable against the lessor unless they’ve been explicitly stated as personal. This will impact how you draft and interpret lease agreements.
- New process for seeking consent to assignment. The new legislation sets out streamlined processes for lease assignments. It still instructs that when a lessee is required to get the lessor’s consent to an assignment of the lease, the lessor is not allowed to unreasonably withhold that consent.
However, now it sets a timeframe for the lessor’s decision about consent. And it gives the lessee the right to apply to court for damages if the lessor unreasonably withholds their consent or requires onerous conditions. - Release of subsequent assignee from lease. The new legislation offers clarity on the obligations of those who are assigned a lease. In particular it removes the ongoing liability for breaches committed by any subsequent assignee even if there is an agreement that requires it.
- Modified termination for default process. The new bill introduces a revised procedure for terminating a lease due to the default by a party. This could impact how breaches to a lease are handled within your contracts.
- New process for lessors to refuse option to renew. Lessors now have a more structured approach to refusing a lease renewal. This change brings clarity to the process, and could also impact your leasing strategies.
Easements and electronic service
- Positive covenants to run with the land. Positive covenants are those that put a requirement or a burden to do something on the owners of a property. For example, there are positive covenants for bushfire hazard reduction which require owners of a property to keep certain areas clear of bushfire hazards.
One of the key changes to the property law legislation makes them enforceable against successors to the property unless they are clearly stated to be personal. - Retrospective operation and electronic service provisions. These changes are designed to embrace the changing digital world. In particular, they modernise the current legal framework and better reflect the evolving nature of property transactions in today’s digital age. An example of these changes is the move to electronic filing and records retention.
How to prepare for Property Law Bill 2023 reforms
With the Royal Assent now on the books these changes are coming, sooner rather than later. And now is the time to prepare. We suggest taking the following steps to ensure that you’re adequately prepared and confident that you’re embracing the changes for the best results for your business:
- Review your existing contracts and leases. Take a close look at your property contracts and leases to see how they might be impacted by the new reforms, and the changes that you need to make in order to get the best results from them. The sooner you do this, the better position you’ll be in when the reforms come into effect.
- Educate your customers and clients. It’s a great idea to spread the word about these changes, particularly to those you work with in the property space. This might be agents, buyers, sellers, lessees, customers, clients and, of course, your internal team. The more informed all the parties are, the smoother the transition will be once the legislation takes effect.
- Consider the implications on future transactions. It’s a great idea to consider how the Property Law Bill 2023, and the legislation that follows, might impact your future deals. This could include property management and investment strategies.
Getting started
The new property laws herald a new era in property law. While it will bring challenges, it will also bring opportunities. At Victor Legal our Brisbane property lawyers can work with you to first understand how these amendments might impact you and your property making decisions, and how you can make the best decisions for the best outcomes. Contact us today!
