Comparing Victorian and Queensland Conveyancing
In Australia, the conveyancing process varies considerably between the different states and territories. Currently in Queensland the adage ‘buyer beware’ rings true, as sellers have comparatively few disclosure requirements. Upcoming property law reforms, however, will shift Queensland away from this model to align the process more closely with southern states.
Grindal Legal’s experience in both Victorian and Queensland conveyancing holds us in good stead to welcome these changes and adapt to Queensland’s new disclosure requirements. This article outlines the major differences between Victorian and Queensland Conveyancing, as well as the future changes that are imminent for conveyancing in the Sunshine state.
| VIC | QLD |
Contract Preparation | Contracts are prepared by a solicitor or licensed conveyancer. | The seller’s real estate agent usually prepares the contract. The buyer typically engages a solicitor or conveyancer after the contract has been signed. |
Cooling off period | 3 days, commencing on the day after the contract is signed by the purchaser. | 5 days, commencing on the day the buyer receives a copy of the fully signed contract. |
Timing of when are Conditions due | Typically, business day is not a defined term. This means that, arguably, parties have until midnight on the due date to satisfy a condition (subject, of course, to specific drafting). There will generally be a special condition specifying that settlement is required to occur between 3.00PM and 5.00PM on the due date. | Typically, the condition is due by 5:00PM on the due date (which must be a business day). |
Nominations | The purchaser has a right to nominate a substitute or additional purchaser to take a transfer of the land. To do this, parties must sign a Sale of Real Estate Nomination Form. | The buyer does not have a right to nominate a substitute or additional purchaser. If the buyer wishes to change parties, then the current contract must be terminated, and a new contract entered into listing the new buyer. |
Release of deposit | The vendor may request a ‘Section 27’ early release of deposit, if certain conditions are met. | The deposit is held on trust, usually by the seller’s agent, and is not released until settlement. |
Timeframes for settlement | 60 - 90 days is common. | 30 days is common. |
Insurance | The property is at the vendor’s risk up to and including the settlement date. | The property is at the buyer’s risk from 5:00PM on the first business day after the contract date. |
Critical dates | Conditions will usually be deemed as satisfied on the due date, if no notice is otherwise provided. Should either party fail to settle on the due date, a Notice of Rescission may be served allowing the party in breach 14 days to remedy. | ‘Time is of the essence’. If a buyer fails to satisfy a condition - such as finance or building and pest - by 5:00PM on the due date, the seller has the right to immediately terminate the contract and retain the deposit. |
Disclosure Statements | Extensive requirements including disclosure of material facts and a Vendor Statement (also known as a Section 32 Statement) must be provided to the purchaser prior to the contract being signed by the purchaser. | The buyer is required to make its own enquiries and undertake due diligence in relation to the property prior to signing the contract. Unless a special condition is inserted into the contract, property searches are conducted after the contract becomes unconditional. |
Language | Contracts refer to ‘Vendor’ and ‘Purchaser’. Further, the statement providing the breakdown of adjustments for settlement is known as a ‘Statement of Adjustments’. | Contracts refer to ‘Seller’ and ‘Buyer’, and the statement of adjustments is referred to as a ‘Settlement Statement’. |
Upcoming Reforms
The new Property Law Act 2023 (Qld) (the Act) will introduce necessary changes to Queensland’s conveyancing process, amongst other updates, and will replace the outdated Property Law Act 1974 (Qld). One of the most significant reforms is the introduction of Disclosure Statements. Whilst the details of the substance of these statements will be clarified in regulations yet to be passed, the implications are beginning to take shape.What we do know is that the Disclosure Statements must be provided to the buyer before they sign a Contract of Sale. The Disclosure Statement must be signed by the seller, and the information provided must be current at the time it is provided. If the property is sold at auction, the Disclosure Statement must be signed and provided to the buyer before the auction commences. Parties are unable to contract out of these requirements.
Content of the Disclosure Statement
The prescribed certificates and information likely to be included in the Disclosure Statement are:
A copy of the title search;
A copy of the plan;
A copy of the notice as prescribed in s47 of the Queensland Building and Construction Commission Act 1991 (if required);
Copies of any notices or orders by a competent authority requiring work to be done or money to be spent in relation to the property;
A pool compliance certificate (if applicable);
A copy of the community management statement and body corporate certificate (if applicable);
Information on the zoning of the property;
Whether the property is recorded on the environmental management or contaminated land register;
Information about the rates and water services for the property (including the amounts payable);
Whether the property is affected by transport infrastructure proposals, heritage interests, or notices from the State or Commonwealth of intention to resume the lot.
The disclosure of further information about the property and certificates will provide significantly more information to buyers than is currently the case. The recommendation remains, however, that contracts are subject to satisfactory building and pest reports. The draft Regulations, in its current form, does not require sellers to disclose pest infestations or information on the structural soundness of the building/improvements on the land.
The seller must ensure that the disclosed information is accurate at the time the Disclosure Statement is signed, with significant penalties for non-compliance including fines and post-settlement compensation. The buyer also has the right to terminate the Contract of Sale at any time before settlement if the seller fails to satisfy its disclosure obligations.
Exceptions
Under the new Act, a Disclosure Statement does not need to be provided if:
The buyer and seller are related;
The buyer waives its right before it signs the contract;
The buyer is a government agency;
The seller is Brisbane City Council in certain situations; and
The transfer is due to someone’s death or in accordance with a Will.
The commencement date of the Act is yet to be announced. We eagerly await the arrival of these reforms and its impact on the Queensland conveyancing process.
Disclaimer: This article does not constitute legal advice and should not be relied upon as such. It is intended only to provide a summary and general overview on matters of interest and it is not intended to be comprehensive. You should seek legal or other professional advice before acting or relying on any of the content.
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