In brief - Sale of community title scheme lots to be covered by
Body Corporate and Community Management Act
Under a draft bill introduced into Queensland parliament, it is
contemplated that allowable deposits to be paid by buyers of
off-the-plan lots will increase, deposits will no longer be paid
directly to developers, red tape will be reduced and non-strata
lots will be able to be sold before development approval is
Separate treatment of strata and non-strata lots
While the bill is designed to amend a number of existing pieces
of legislation, its primary intent is to remove from the Land Sales Act 1984 (Qld) the sections regarding
off-the-plan lots to be included in a community title scheme
("CTS lots"). The intent is that the relevant sections
will be moved into the Body Corporate and Community Management Act 1997 (Qld)
(BCCMA), while the Land Sales Act will remain solely to
deal with off-the-plan lots that will not be included in a
community title scheme ("non-CTS lots").
Increase in allowable deposits from 10% to 20%
If the bill is passed, developers of both CTS lots and non-CTS
lots will be allowed to take deposits from buyers of up to 20%
(previously 10%) of a contract price. This will no doubt assist
developers in obtaining construction funding.
Removal of requirement for development approval to be in
It is intended to remove the requirement that the sale of a
non-CTS lot can only occur once a development approval is in place,
although developers of non-CTS lots will still be required to
effect settlement within 18 months of a contract date.
Buyers will have the right to terminate a contract for a non-CTS
lot if they are materially prejudiced as a result of any changes
between the initial disclosure plan for a non-CTS lot and the final
survey plan that is registered to create title.
This will remove the technical provisions regarding the giving
of a "significant variation notice" for changes to a
non-CTS lot between pre-contract disclosure and registration.
Removal of need to seek exemption
Currently, buyers of non-CTS lots in a small subdivision (i.e.
less than five non-CTS lots to be created) are required to seek
exemption for the transaction from the Office of Fair Trading. The
proposal is that the need to obtain an exemption will be removed,
with sales of non-CTS lots in a small subdivision to be
automatically exempt from the application of the Land Sales
Buyers and sellers involved in large transactions (i.e. the sale
of six or more non-CTS lots in one transaction) will continue to be
exempt from compliance with the Land Sales Act.
Clarification regarding options
If a buyer and a seller enter into an option for a CTS lot or a
non-CTS lot, and relevant disclosure requirements are complied with
before the option is entered into, the intent is that the seller
will not need to repeat the disclosure requirements if the same
buyer enters into a contract arising from an exercise of the
The seller will be required to comply with the disclosure
requirements if a nominee buyer enters into a contract arising from
an exercise of the option.
Inclusion of proposed survey plan in disclosure statements for
It is proposed that a disclosure statement for a CTS lot will
now be required to include the proposed survey plan that will
create the CTS lot. We note that the prudent developer should
already be doing this, but some developers are instead currently
including architectural drawings in disclosure statements.
The current practice of combining disclosure requirements under
the Land Sales Act and the BCCMA for the sale of CTS lots
will discontinue, as all requirements for the sale of CTS lots will
be included in the BCCMA.
Further, unless the developer specifies otherwise in the sale
contract, an automatic sunset date of five and half years will
apply from the contract date. The current requirement relating to
three and half years (with the potential of an extension) will be
Deposits no longer to be paid directly to developers
The proposal is that deposits must be paid directly to a real
estate agent, a law firm, or the public trustee - if the bill is
passed, developers will no longer be able to take any type of
deposit (including for an expression of interest) for a CTS or
non-CTS lot and then forward the deposit to the real estate agent
or law firm at a later date.
Consultation process to continue
The Queensland government will continue its consultation process
regarding the draft bill. We will let you know as the law changes
in this area.
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