In recent times, plunging property values have prompted many
buyers to look for ways to escape their contracts by relying upon
technical breaches by sellers of the Property Agents and Motor
Dealers Act 2000 (Qld) (PAMDA).
The rigidity of PAMDA was highlighted last year in Hedley
Commercial Property Services Pty Ltd v BRCP Oasis Land Pty Ltd
 QSC 261. In that case the court acknowledged that any
non-compliance with PAMDA in the contract formation process, no
matter how trivial, gave the buyer a right to terminate.
However, the pendulum appears to be swinging back in favour of
sellers. There have been a number of recent decisions which suggest
that courts are now prepared to adopt a more practical view of
PAMDA's highly technical rules, especially in relation to
"off the plan" contracts.
In the recent case of Collins v Currumbin Investments Pty Ltd
 QSC 275, the court found that the buyer was not entitled to
terminate the contract because the seller's agent failed to
expressly draw the buyer's attention to the warning statement.
There was no issue as to whether the buyer received the warning
statement. Rather the issue was whether the buyer's attention
was adequately drawn to the warning statement by way of enclosure
under a cover letter. In the end, common sense won the day and the
court held that referring to the warning statement in the cover
letter was enough to comply with PAMDA.
This decision is a good result for sellers as it indicates that
the courts now appear willing to consider the practical reality of
these types of transactions.
Having said that, sellers should not be lulled into a false
sense of security. Neglecting to comply with PAMDA's strict
requirements can have disastrous consequences. For example, earlier
this year in Hudpac Corporation Pty Ltd v Voros Investments Pty Ltd
 QSC 275, the court held that the buyer validly terminated
the contract when the seller failed to provide the buyer with a
rectification statement as required by PAMDA.
The moral to the story for sellers is to be aware of your
obligations under PAMDA.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Whilst option to purchase clauses are more in commercial properties, they are now being included in residential leases.
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