Back in 1974, there were 13 million people in Australia, an average priced house cost about $20,000, Barbra Streisand sat atop the music charts and the internet was still nine years away. In Queensland, the Property Law Act of 1974 was introduced to govern the selling and buying of property.
Plenty has changed in the world in the almost 50 years since. We have seen the rise of auctions, surging property prices and a bump in buyer competition as construction fails to keep pace with population growth. But Queensland property is still subject to that same legislation.
A major challenge for property buyers in recent years has been to make informed decisions about the complex process of purchasing a property, in a timely enough manner that they don’t get gazumped by the other buyers out there.
And there is plenty at stake, because for most of us, buying property is the biggest financial decision we make in our lifetimes. It’s important to get it right and buyers need to be given every opportunity to do so. So it makes sense that we need a legal update.
This year the Property Law Bill 2023 was introduced in Queensland, in a bid to replace the existing 1974 act. The bill is expected to pass later this year and come into effect next year.
What does it mean for sellers?
In essence, sellers will have to disclose more information about their properties, relating to their condition, history and potential issues.
This information will be provided, at the seller’s own cost, in a single document, currently known as the ‘Proposed Disclosure Statement’ (PDS). Similar statements exist in some other states already.
The PDS will include information about:
-The property title, including ownership status, and any attached mortgages or other encumbrances.
-The property’s planning and zoning status, including relevant restrictions on height, density, residential or commercial use.
-Any unlicensed building work that has been carried out at the property.
-Any proposed transport infrastructure that may affect the property or its value.
-Rates and water accounts.
-Where relevant, a body corporate certificate, community management statement and any exclusive by-laws.
-For commercial properties, whether a Building Energy Certificate is available on the Building Energy Efficiency Register.
-Written notices for environmental issues that may impact the property, such as contamination, pollution or other hazards.
If the current PDS is implemented, sellers will find the onus squarely on them when it comes to providing the required information and detail. Non-compliance could potentially see sales contracts terminated and severe penalties handed out.
Buyers to save time
The big bonus for buyers will be that by the time a property hits the market, the sellers will have been obligated to put all these things in place, meaning there will be an immediate layer of protection for anyone looking to purchase the property that hadn’t previously been in place.
Buyers will be able to bid for or make offers on properties, while being comforted that there won’t be any hidden “nasties” lurking around the corner if they are successful.
They will be able to make deals without feeling like they are rushing and skipping over due diligence in order to avoid missing out.
Things that are not currently included
Buyers will still need to be aware of what isn’t covered by the new bill. For example, they will still need to do their own detective work when it comes to flooding history; building and pest reports; current or historical use of the property; licensed building work or approvals; planning law limitations regarding the land; services that are or may be connected to the property.
The overall effect on the market should be that more transactions are carried out without delay, as the most time will be spent on accessing information prior to listing.
Sellers may find there are more buyers interested in their properties, due to less leg work required for each. Previously, buyers who had already missed out on properties they were interested in might have been reluctant to go through the whole process again for a property they were only 50/50 about.
There will also likely be fewer post-purchase disputes as buyers will have no one else to blame if they overlook anything.
How will it affect investors?
Investors are focused more on whether the numbers stack up than whether they would like to live in the property they are purchasing. Having all the information at their fingertips will likely appeal to investors, who will feel more empowered to make unconditional offers on a property.
The flipside is that if an investor is looking to flip for a profit, or sell later, they may be discouraged by the effect any underlying issues might have on a property’s resale value.