CONVEYANCERS say Queensland’s new seller disclosure laws, the biggest overhaul to property laws in 50 years, have run into problems as buyers and sellers acclimatise to the regime.
Under the new rules, which took effect in August and bring Queensland into line with the rest of Australia, a property vendor must provide to a buyer a “seller disclosure statement” and prescribed certificates prior to signing a sale contract.
The stakes are high, with a failure to comply on seller disclosure meaning a buyer may be allowed to terminate the contract prior to settlement.
MAP Lawyers director Megan Roberts says the regime is “coming with its challenges”, especially with body corporate certificates taking a long time and often being incorrect.
“I feel for the body corporate managers because they I don’t think it’s been rolled out particularly smoothly for them,” says Roberts, whose Brisbane-headquartered firm operates in several locations across the state, and specialises in conveyancing.
Roberts says, in the case of incorrect certificates, her firm is “going back and saying this has got to be corrected, but there’s a whole lot of firms that aren’t doing that”.
“The contract gets signed and then it’s giving a buyer a right to terminate – the consequences are pretty catastrophic.”
Another issue, she says, are third parties offering drafting services, or agents drafting independently, resulting in forms that are “riddled with mistakes” and another way a right of termination or a potential claim for compensation is being created.
“It doesn’t really, in my view, address what the Queensland government set out to achieve because there’s no obligation on a seller to disclose unapproved building works unless there’s enforcement notices or a show cause being issued,” she says.
“There’s a lot of buyers out there thinking that the seller has to disclose everything but that’s not necessarily the case.”
Jared Zak, principal solicitor and founder of Dott & Crossitt, a franchise network of licensed conveyancers and solicitors, says the seller disclosure was being produced in the form of a document prior to marketing and that it “seemed like a pretty simple thing”.
“In NSW and Victoria lawyers are involved from the outset to produce documentation and the agents and the conveyancers work together and they achieve that,” Zak says.
By contrast, he says the relationship between agents and conveyancers in Queensland has got off to a rocky start under the revamp.
According to Zak, lawyers “now need to be involved at the start of the process and that’s creating huge friction because agents aren’t used to dealing with solicitors.”
“What’s causing massive issues is that agents are complaining about huge delays. In the scheme of things they’re not huge delays it’s taking five or six days to provide a pre-marketing legal document. That’s standard in NSW but it’s kind of blowing their minds.”
Kirsty Paynter, a law lecturer at Queensland’s Griffith University, says it’s not unsurprising issues have emerged with the new regime given its recent commencement.
“Unfortunately, with any big change that there are going to be teething problems as people try to understand what is and what isn’t included with seller disclosure,” Paynter says.
The academic, like Roberts, points to an issue with the term “seller disclosure statement” being used when some important information, such as flood risk, pest infestation and structural soundness, are not mandated inclusions.
“I think that the form does a great job in highlighting, in the very first part of the form, that the statement doesn’t include information about flooding or other natural hazard history, but I think the issue is that it’s called a seller disclosure statement,” she says.
“I think there’s a legitimate expectation from a buyer that flooding – whether a property they want to buy has been flooded – would be disclosed to them from the seller.”
“We certainly haven’t fully moved from the buyer beware situation we were in,” she adds.
A Queensland Law Society spokesperson said it appreciated that the new laws are a fundamental shift for property sales in Queensland.
“With such a big change, we know many practitioners are experiencing a period of adjustment,” the spokesperson in a statement
“The new laws are a welcome consumer protection measure that delivers great benefits for both buyers and sellers,” the spokesperson said, describing them as “the culmination of more than a decade of sustained advocacy” since 2013.
The state’s peak legal body said similar laws operated in other states “and we expect that practitioners in Queensland will likewise find the changes soon become business as usual.”