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Queensland’s peak real estate body has raised several concerns surrounding the state’s Property Law Bill, which entered parliament last week.
Under the legislation, billed as modernising Queensland’s property laws, a seller disclosure scheme will be made mandatory in the sunshine state.
That disclosure scheme will require “a seller of freehold land to disclose relevant information to the buyer in a single document along with any prescribed certificates, including a body corporate certificate, where relevant,” according to a government statement.
Real Estate Institute of Queensland (REIQ) chief executive officer, Antonia Mercorella, said, “It’s alarming that the proposed legislation has been introduced into Parliament while we [the REIQ] are still in the process of working through key stakeholder consultation.”
The scheme will also alert prospective buyers to the need to undertake their own due diligence on flood information and point them to appropriate resources to access the property’s flood information.
Despite supporting the bill, Ms Mercorella said this support was subject to the establishment of appropriate disclosure parameters and reasonable considerations of the costs and accessibility of information required by the scheme.
The concerns raised by the REIQ include:
- Impractical and unnecessarily complex requirements associated with the provision of a disclosure statement at auctions
- The counter-productive and regressive reintroduction of Community Managed 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
Ms Mercorella explained that the REIQ “recognises the benefits associated with a single statutory disclosure regime, ensuring all buyers have access to appropriate information to make informed decisions.”
“But this must be balanced with relevant and clearly defined disclosure requirements,” she said.
She explained one of the institute’s primary concerns relates to the proposal to require disclosure documents to be provided in different ways depending on whether a bidder arrived before or just after an auction began.
“The proposed requirements are unnecessarily complicated and demonstrate a lack of understanding of the principles of an auction sale,” she said.
Moreover, the chief executive expressed disappointment at seeing a “proposal to reintroduce a past failed legislative measure” in relation to the law’s requirement to provide a community management statement in connection with a sale of lots in a community title scheme.
“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.”
Concerns were also raised around the bill’s ambiguity regarding matters that would give rise to potential termination rights, especially considering the state’s “concerning history of real estate legislation leaving too much room for interpretation.”
The REIQ also harbours concerns surrounding a lack of planned infrastructure and resources to support sellers and ensure equal access 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.
“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.”
With real estate a core component of the state’s economy and the everpresent housing crisis, Ms Mercorella concluded that “this is simply too critical an issue to rush this process through at the last minute.”
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