How the new Property Act will affect your agency
18 December 2014
The Property Occupations Act 2014 commenced on 1 December 2014 and is one of the four Acts that has replaced the Property Agents and Motor Dealers Act 2000 (PAMDA).
The new Property Act brings major changes for the sale of residential property in Queensland, according to Principal Lawyer with the Commercial and Property Team Elene Tzimas. Following are some of the significant amendments:
The residential property sales provisions in Part 7 do not apply where the buyer is a publicly-listed corporation, a subsidiary of a publicly-listed corporation, the State or a statutory body, or where the buyer is purchasing at least three lots at the same time.
There is no longer a requirement for sellers or agents to attach a PAMDA Form 30c Warning Statement or a Body Corporate and Community Management Act 1997 Form 14 Information Sheet to a residential property contract.
Instead, the seller or agent must include the following wording, or words which are of a similar effect, in the contract itself:
The contract may be subject to a five business day statutory cooling-off period. A termination penalty of 0.25% of the purchase price applies if the buyer terminates the contract during the statutory cooling-off period. It is recommended the buyer obtain an independent property valuation and independent legal advice about the contract and his or her cooling-off rights, before signing.
This statement must be placed on the same page on which the buyer signs the contract and directly above the space for the buyer’s signature to indicate that the buyer intends to be bound by the contract.
New versions of the Real Estate Institute of Queensland (REIQ) residential contracts contain this wording. However, if your contracts have a separate page on which the buyer signs, then this statement will need to be reproduced on that page directly above the buyer’s signature.
Under the new provisions, the buyer will no longer have a right to terminate the contract for failure to include the new warning statement.
The five-day cooling-off period for residential property contracts has been retained, although it does not apply where the State is the buyer.
Contracts formed at auction or within two business days after an auction, where the buyer was a registered bidder, have no cooling-off period.
The PAMDA Form 32a Lawyer’s Certifications will no longer be required to provide a certificate of independence or to waive or shorten a cooling-off period. Instead, the buyer may waive or shorten the cooling-off period by written notice to the seller.
The definition of ‘residential property’ has been simplified. This term is now defined as:
real property that is used, or is intended to be used, for residential purposes but does not include real property that is used primarily for the purpose of industry, commerce or primary production.
Under the transitional provisions, PAMDA will continue to apply to relevant contracts entered into prior to 1 December 2014.
If a relevant contract and disclosure statement were issued prior to 1 December 2014, unless the contract was signed by both parties and the buyer was notified by 30 November 2014, the seller must re-issue the documents in the new form required by the Property Occupations Act 2014.
New forms available
New forms must be used from 1 December 2014 and are available on the Office of Fair Trading website. These forms replace all of the forms previously required under PAMDA.
If you have precedent or templated contracts, you are advised to update them to comply with the new requirements.
The information in this publication is provided for general purposes only. It is not to be relied on as a substitute for legal advice. Crown Law and the Department of Justice and Attorney-General accept no liability for losses caused by reliance on the material in this publication. Formal legal advice should be obtained for particular matters.
Published: 18 December 2014
Author: Elene Tzimas