Australian Property News

Legal implications could result if Queensland sustainability declarations are incorrect

Posted on Thursday, September 09 2010 at 1:00 PM

If Queensland sustainability declarations on properties for sale are completed with misleading information there could be legal consequences, according to consumer advocate and O’Dwyer and Bradley Solicitors principal Tim O’Dwyer.

“But it would be a brave government to prosecute its first mum and dad sellers for a breach of this legislation,” he said.

In the sustainability declaration legislation introduced from January 1 this year, the Queensland Government states that a buyer cannot cancel a sales contract if information is found to be incorrect because the declaration doesn’t form part of the contract of sale, however if information is misleading or incorrect, the seller may be liable to compensate the buyer for the loss or expense.

But Metrocity Realty manager Kylie Jackson said both agents and vendors are still concerned about the legal repercussions down the track if the declaration is completed incorrectly.

O’Dwyer said the legislation states that there are no adverse consequences for buyers or sellers legally if sustainability declaration forms aren’t completed accurately or fully as far as their contractual terms are concerned, “however a buyer may take action if they relied upon it when signing the contract and later found it was misleading”.

Additionally, agents could be legally liable if they give advice to sellers on what to complete and the buyer later takes action, said O’Dwyer. “A smart agent would give the form to the seller and tell them to go away and fill it in and tell them if they had any questions to see their local government or read the instructions online.”

Now that the Gillard Government has been returned to power, before her team rolls out mandatory sustainability declarations across the nation as discussed in a meeting with the Council of Australian Governments in 2009, they need to choose the right model because currently the Queensland version is a “non-event”, said O’Dwyer.

Disclosure legislation should be modelled on the Australian Capital Territory’s full disclosure model, which includes termite and structural reports, said O’Dwyer.

“Already New South Wales is looking very seriously at full disclosure but Queensland still has its head stuck in the sand.

“This state has a burning need for mandatory disclosure by sellers on issues such as white ant damage, flooding, and whether structures are being approved or even legal, these are the real issues,” said O’Dwyer.

“It would mean more secure sales and more informed buyers.”

Prior to the mandatory legislation rollout of the sustainability declaration, which allowed owners to complete the forms themselves, the initial idea was that vendors would pay an assessor around $300 for an environmental and social sustainability assessment of the energy, water, access and safety of the property, said Jackson.

“So some people rushed out to obtain assessment licenses for around $5000 with an instruction course. I guess they thought it would be a way to cash in on the new legislation,” she said.

But then from January 1 this year, the new legislation rolled out with checklist forms designed for the vendor to complete, and to be made available for display at open homes and on request through the real estate agent.

She said the market for assessors had suddenly fallen flat.

It became mandatory for advertisements to mention where a copy of the sustainability declaration could be obtained, excluding newspaper and magazine advertisements, she said.

While initially designed as a marketing tool for agents and vendors, and increased disclosure for buyers, it’s now turned into a seller and agent’s headache due to the form’s complexity, and as a result a blank form for buyers, said Jackson.

She said that vendors aren’t taking the form seriously. “What’s the point if vendors can leave the form blank and just sign their names? It’s just another unnecessary process for agents and sellers to go through.

“Buyers still aren’t at the stage of buying a property just because it has, for example, insulation or a water tank, it’s still just an added bonus. We don’t receive many requests from buyers to view the declarations at all,” she said.