The Queensland Government has released the Property Occupations Bill 2013, which is proposed legislation to address a number of property industry concerns about contract disclosures and warning statements and the licensing of real estate agents and other property professionals.
Since its introduction in 2000, the Property Agents and Motor Dealers Act (known as “PAMDA”) has been considered by many to be a burdensome piece of legislation which has increased in complexity and technical regulatory requirements over time. For example, the high level of technical compliance in relation to warning statements has produced case law about whether a warning statement bound or stapled to a residential sale contract was considered to be the first page of the contract. There have been concerns raised about PAMDA for quite some time and the introduction of the Property Occupations Bill 2013 is likely to be seen as a welcome relief. The Queensland Government is intending to repeal PAMDA and split its content into 4 separate bills, including the current Property Occupations Bill.
While the Government believes the Property Occupations Bill strikes a reasonable balance between consumer protectionism and doing business in the marketplace, it does represent a significant shift away from the current level of consumer protectionism. This Bill also goes some way in achieving the Queensland Government’s goal of removing unnecessary ‘red tape’ for the real estate sector.
Who does this affect?
- Real Estate Agents
- Property Developers
- Buyers and sellers of residential property
- Body Corporate & Community Managers
Key aspects and impacts
In summary, the Bill seeks to achieve the following outcomes:
- Remove the cumbersome and highly technical requirement for a Form 30c Warning Statement to buyers for residential property sales.
- Replace the residential property warning statement with a prescribed statement (or words to like effect) to be included in particular residential sale contracts (for example, not where contract is formed on a sale by auction or where the Buyer is purchasing at least 3 lots at the same time, whether or not in the 1 contract). This statement is to appear immediately above, and on the same page as, where the buyer signs the contract.
- No longer give a buyer a right to terminate the sale contract but instead impose a maximum penalty where there is failure to comply with the warning statement/disclosure requirements (200 penalty units being $22,000 for an individual or $110,000 for a corporation).
- Significantly simplify the definition of ‘residential property’, which now includes vacant land if it is ‘intended to be used, for residential purposes…’.
- Maintain the existing cooling off period of 5 days for a buyer.
- Reduce the existing 9 categories of licence under PAMDA to the 3 licence categories of real estate agents, auctioneers and residential letting agents.
- Remove licensing of property developers - licensing is currently only required in Queensland. However, particular requirements on property developers including about disclosure and acceptance of deposits will continue to exist.
Real Estate Agents
- Deregulate real estate commission caps in line with other jurisdictions. The cap effectively became a standard rate and its removal is expected to increase competition in the market.
- Limit on the length of sole and exclusive agency appointments have been extended from 60 days to 90 days.
- Provide receivers and managers, liquidators, controllers, and administrators of a corporation under the Corporations Act the ability to carry out real estate activities under a corporation licence without the need to have a separate licensed individual.
- Introduce a registration certificate system for real estate sales employees of real estate agents.
Body Corporate and Community Management Act
- Import the simplified definition of ‘residential property’ into the BCCMA.
- Remove the need to attach an information sheet in the approved form to a contact for the sale of a lot that is not residential property and so remove the buyer’s right to terminate a contract in those circumstances.
- Remove the buyer’s right to terminate in particular circumstances if an existing lot, the subject of the contract is residential property in a community titling scheme and the seller/seller’s agent fails to give a clear statement relating to an information sheet in the approved form as required by the PAMDA.
- Simplify the disclosure regime so that the contract terms includes a disclosure statement and all supporting material and not require completion of an approved form. The current disclosure requirements for an existing lot and a proposed lot are maintained.
- Maintain the right of the buyer to terminate a contract if a seller has not complied with the BCCMA requirement for a disclosure statement if the contract has not already been settled.
- Remove the buyer’s right to terminate a contract for a lot proposed to be in a community titling scheme where the seller/seller’s agent has failed to give the clear statement required by PAMDA relating to an information sheet.
Some key transitional arrangements for this Bill include:
- Existing licences and registration certificates under PAMDA are replaced with a new licence/registration certificate (or for pastoral house salespeople and auctioneers, more than one licence/registration certificate) after commencement of the Bill.
- Existing licences and registration certificates will remain valid until expiry as if PAMDA had not been repealed, except shorter expiry times will apply to transitioned licences/registration certificates for an auctioneer licence, chattel auctioneer licence and trainee auctioneer.
- Existing agent appointments will continue until the earlier of the following: (1) until the appointment ends, or (2) the end of 60 days after the appointment is made.
- Property Developer’s licences and Property Developer Director’s Licences will end on the repeal of the PAMDA.
- Preservation of a buyer’s existing right under PAMDA about a notice about vacant land not given or a materially defective notice about vacant land that has been given.
- Preservation of a buyer’s existing rights under PAMDA in relation to residential property sales.
Submissions to Government
The Bill has been referred to the Legal Affairs and Community Safety Committee for consideration. The Committee is inviting public written submissions, with a closing date to be advised. If you would like us to assist you in making a submission to the Committee or about any aspect of the Bill, please contact David Bell, Damiano Castelli or Holly Monks.
Please continue to watch this space for further detailed updates in this area.