Queensland real estate transaction reform bill comes under fire
The Real Estate Institute of Queensland says a new property law bill seeking to introduce a uniform statutory seller disclosure regime has been rushed to parliament without proper consultation.
The Real Estate Institute of Queensland (REIQ) says it’s disappointed that the Property Law Bill has been prematurely introduced into Parliament while there’s still material matters to be worked through.
The Bill seeks to implement a formal seller disclosure regime in Queensland to make it easier for home buyers to know more about the property they are buying.
The Queensland Government said the new legislation has been developed to modernise property laws in Queensland with contemporary language that reflects current commercial practice. The Property Law Bill 2023 will replace the current Property Law Act 1974, which has not been comprehensively reformed since it was introduced.
REIQ CEO Antonia Mercorella said while the real estate peak body supported the introduction of a uniform statutory seller disclosure regime, this support was subject to the establishment of appropriate disclosure parameters and reasonable costs and accessibility to information associated with disclosure requirements.
The REIQ has raised a number of concerns with the proposed legislation including:
- impractical and unnecessarily complex requirements associated with the provision of a disclosure statement at auctions
- the counter-productive and regressive reintroduction of Community Management Statement (CMS) disclosure when selling lots in a Community Titles Scheme
- ambiguity regarding circumstances giving rise to buyer termination rights
- onerous obligations on sellers to disclose and describe unregistered encumbrances to buyers
- yet to be determined flood-related disclosures and warnings.
“We recognise the benefits associated with a single statutory disclosure regime ensuring all buyers have access to appropriate information to make informed decisions when buying property in Queensland, but this must be balanced with relevant and clearly defined disclosure requirements,” Ms Mercorella said.
“We are the peak body for real estate professionals in Queensland, with an unparalleled understanding of the way real estate transactions are facilitated in this state, so it’s alarming that the proposed legislation has been introduced into Parliament while we are still in the process of working through key stakeholder consultation.”
Ms Mercorella said that among the REIQ’s material concerns, was the proposal to require disclosure documents be provided in different ways depending on whether a bidder arrived before or just after the commencement of an auction.
“The proposed requirements are unnecessarily complicated and demonstrate a lack of understanding of the principles of an auction sale,” she said.
She also noted that the reforms intend to take a regressive step by seeking to reintroduce the requirement to provide a Community Management Statement (CMS) in connection with a sale of lot in a Community Titles Scheme.
“It is disappointing to see a proposal to reintroduce a past failed legislative measure,” Ms Mercorella said.
“In some instances, a CMS can be complex and voluminous and research has shown that consumers are often overwhelmed by too much paperwork and the information is therefore largely ignored.
Reform bill mistakes could be costly
Ms Mercorella said that it was also concerning that the Bill remained ambiguous in relation to matters that would give rise to potential termination rights.
“Queensland has a concerning history of real estate legislation leaving too much room for interpretation,” she said.
“We only have to look at the Property Agents and Motor Dealers Act (now repealed) to see the significant amount of disputes and litigation that arose from poorly drafted legislation.”
Queensland was also forced recently to scrap a controversial land tax.
Lastly, Ms Mercorella said the REIQ was disappointed at the apparent lack of planned infrastructure and resources to support sellers and ensure equal accessibility and reasonable costs for sellers to access information required to comply with the disclosure regime.
“If you are going to take the significant step of introducing a formal disclosure regime into Queensland, it’s essential that there are appropriate infrastructures in place to support it,” she said.
She said as a key stakeholder, the REIQ had provided crucial input and acknowledged that consultation regarding property disclosure had been ongoing over many years, however some material matters remained outstanding, including unfinished discussions regarding flood-related disclosures.
“As the state peak body for real estate, we know that the ‘wrong’ disclosure regime will add unnecessary expense and delays to the selling and buying process for Queenslanders,” Ms Mercorella said.
“Given the significance of real estate to the Queensland economy and the housing crisis we are facing, this is simply too critical an issue to rush this process through at the last minute.”