The Property Law Act 2023 (Qld) (PLA 2023) is set to commence on 1 August 2025 and will replace the current Property Law Act 1974.
The PLA 2023 imposes a mandatory seller disclosure scheme in Queensland for both residential and commercial sales, including properties sold by auction or negotiated sales. Subject to some exceptions, the new scheme mandates that sellers provide prospective buyers with a disclosure statement and prescribed certificates before the buyer signs the contract of sale. The primary objective is to enhance transparency and ensure buyers are well‑informed before entering property transactions.
The PLA 2023 specifies that, subject to certain exceptions, seller disclosure is compulsory and cannot be contracted out of by the seller or through agreement by the parties.
This is likely to have impacts for local governments and it is important to understand what these changes will mean.
Standard Sale with Full Disclosure
Under the new regime, local government sellers in standard property sales must provide a completed and signed Form 2 Seller Disclosure Statement, along with the necessary prescribed certificates, to the buyer before the contract of sale is executed. These documents must be prepared in accordance with section 99 of the PLA 2023 and its accompanying regulations.
The disclosure statement requires sellers to gather essential property information, including:
- title details;
- easements and encumbrances; and
- all other material facts that could influence a buyer’s decision to purchase.
The prescribed certificates include documents such as:
- title search;
- registered survey plan; and
- registered and unregistered encumbrances, such as easements, leases, statutory covenants, and private agreements.
This reform shifts a significant time and financial burden onto sellers – responsibilities that have historically fallen on buyers under the principle of “buyer beware”.
Exceptions for Local Governments
While the PLA 2023 enforces strict disclosure requirements, it also sets out several exceptions where disclosure is not mandatory. In the local government context, the following exemptions are relevant :
1. Government Entities
Buyers that are the Federal, State, or Local Government or a statutory body are exempt from the disclosure requirements.
2. Selling Land for Overdue Rates or Charges
Where the local government is selling the property to recover overdue rates and charges pursuant to the Local Government Regulation 2012, the disclosure obligations are exempt but only if:
- prior to signing the contract, the local government provides the buyer with a notice stating that the buyer is responsible for making their own enquiries regarding matters affecting the property; and
- that the seller is not required to comply with section 99 of the PLA 2023.
This is an important step to carry out, to ensure that local governments retain the benefit of this exemption.
3. Acquisitions
Properties acquired by local governments as a constructing authority under the Acquisition of Land Act 1967 are also exempt from disclosure requirements.
4. Boundary Realignments
In cases where property boundaries are being realigned, perhaps to rectify encroachments, the transaction is exempt.
5. Sales exceeding $10m including GST
Buyers can by written notice waive compliance for any contracts exceeding $10 million including GST.
Consequences of Not Complying
If the seller fails to give a disclosure statement or prescribed certificates or provides disclosure documents that are inaccurate or incomplete regarding a material matter, and the buyer was unaware of the correct information at the time of signing, the buyer has the right to terminate the contract at any time before settlement.
It is possible that Councils may see increased pushback from buyers attempting to leverage the disclosure obligations to exit contracts under the new scheme, as it significantly strengthens buyer protections.
Conclusion
Local governments have many and varied responsibilities, so it will be essential for local governments to thoroughly assess each property sale to determine whether a disclosure obligation exists or if an exception can be applied.
For further advice and assistance with disclosure obligations under the new Property Law Act 2023 (Qld), or to ensure your local government is fully compliant with the new statutory requirements, please contact our Local Government team at Preston Law.