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Conveyancing Law Queensland: Year in review

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Content updates

We started 2022 with two new standard residential contracts, REIQ Contracts for the Sale of Houses and Land and Residential Lots in a Community Titles Scheme. The significant changes introduced by these versions of the contracts were explained in the previous Alert in December 2021.

New REIQ Contracts 
The contracts were released on 20 January 2022 to coincide with the commencement of changes to the smoke alarm requirements under the Fire and Emergency Services Act 1990 and Building Fire Safety Regulation 2008
A summary of the changes in both residential contracts appears under New Developments at [ND:30] in the Queensland Conveyancing Manual.
On 21 July 2022 new editions of the REIQ Commercial Land and Buildings Contract (9th ed) and Commercial Lots in a Community Titles Scheme Contract (8th ed) were also released. One of the major changes to the Commercial Land and Buildings Contract was to align the clauses with the Houses and Land Contract with variations or additions to accommodate specific features of commercial sales. The main objective of this iteration of the Commercial Contracts was to streamline the suite of standard contracts and improve consistency in the operation of the common clauses.
Commentary in Chapter 2 of the Conveyancing Manual has been updated and reorganised to provide an explanation of all clauses in each contract with easy to use comparative tables and cross referencing.
The Commercial Land and Buildings Contract and Commercial Lots in a Community Titles Scheme Contract both include the same significant changes as the Residential Standard Contracts including:
•    New clause 6.2 allows either party to give an Extension Notice nominating a new date for settlement up to 5 business days after the Scheduled Settlement Date. 
•    Express provision is made in clause 2.2 for the payment of the deposit by direct debit. Clause 2.2(3) provides clarity in relation to when a deposit is paid by direct debit and imposes a restriction on the seller terminating if the deposit is not in the account of the deposit holder by the due date..
•    New definition of Contract Date in clause 1 is amended to accommodate signing by contracts in Realworks using DocuSign by real estate agents.
•    New termination rights in clause 7.5 for a buyer where land or a lot is affected by services infrastructure that are not legally protected by an easement or statutory authority disclosed to the buyer.  

Smoke alarms – new requirements 
New smoke alarm requirements commenced on 1 January 2022. If a home or residential unit is being sold or leased or a lease renewed, smoke alarms must be installed by the owner in compliance with s 104RBA Fire and Emergency Services Act 1990:
(a) be powered in a way prescribed by regulation; and
(b) comply with other requirements prescribed by regulation (Note Building Fire Safety Regulation 2008, ss 55C – 55E); and
(c) have been manufactured less than 10 years before the smoke alarm is installed; and
(d) operate when tested; and
(e) be interconnected to every other smoke alarm installed in the domestic dwelling.
Sellers are required to disclose to the buyer if smoke alarms complying with these requirements are installed in the dwelling. A failure to accurately disclose will incur a penalty. 
Changes were also introduced to the REIQ Residential Contracts to ensure compliant smoke alarms are installed in the dwelling.
Clause 7.8 requires all smoke alarms to be updated and compliant by settlement or the buyer is entitled to claim a reduction in the purchase price.

Electronic Deeds – amendments to Property Law Act 1974
Provisions to allow electronic deeds, signed by individuals or corporations were inserted into the Property Law Act 1974 by the Justice and other Legislation Amendment Act 2021, commencing on 30 April 2022. These amendments were similar to the Covid temporary measures previously  in the Justice Legislation (COVID-19 Emergency Response—Documents and Oaths) Regulation 2020
Sections ss 44-46 of the Property Law Act 1974 are replaced with sections 44-46H.
These provisions provide in summary:
•    Requirements for a valid deed subject to Queensland law (in either writing or electronic form)
•    Validity of deeds signed in electronic form
•    Specific rules for valid execution of deeds by corporations, statutory corporations, corporations sole, partnerships, unincorporated associations and the State
•    Execution of deeds in counterparts either physical or electronic
The rules about delivery of deeds were not changed by these amendments.
Section 44-46H are replicated in the proposed Property Law Bill 2022 but some additional refinements in relation to delivery and the rule in Pigot’s case are proposed.

Electronic Deeds – Amendments to the Corporations Act 2001
On 23 February 2022, sS 126, 127 and 129 Corporations Act 2001 were amended by the Corporations Amendment (Meetings and Documents) Act 2022. This legislation introduced permanent amendments to ss 126, 127 and 129 Corporations Act 2001.
These amendments to the Corporations Act 2001 facilitate the electronic signing of all documents, including deeds, signed by a corporation governed by that Act.  A document signed in accordance with s 126 or s 127 of the Corporations Act 2001 will comply with the requirements in s 46F(1) and (2) of the Property Law Act 1974. Importantly this means that the presumptions in s 128 and s 129 Corporations Act 2001 will apply to a deed executed by a corporation in accordance with s 46FPLA or ss 127(1), (2), (3A) Corporations Act 2001.
If the deed is signed for a corporation by an agent or attorney, electronic execution is prima facie valid as a deed (s 46F(1)(d) Property Law Act 1974). Despite the assumption in s 129(3) Corporations Act 2001 it is prudent to seek confirmation of the agent or attorney's authority to sign for the company as the presumptions in s 129(5) do not apply.

Changes to residential tenancies - Housing Legislation Amendment Act 2021
Changes to residential tenancy laws were made by the Housing Legislation Amendment Act 2021. The amendments are commencing in stages.
Stage 1 commenced in October 2021 and primarily concerned options for people experiencing domestic and family violence to end a tenancy. These arrangements are similar to those that were in place as temporary measures during the COVID-19 pandemic period with some changes made based on learnings from the COVID-19 implementation. 
Stage 2 commenced on 1 October 2022. Keys changes included 
•    Rules preventing landlords from refusing a pet except on certain prescribed grounds
•    New provisions for ending a tenancy
•    Repair orders.

Pets
Blanket no pet rules are prohibited and a wide range of pets are included in the laws. A landlord is required must respond to a tenant’s request to keep a pet within 14 days and if they do not respond within the specified time, the request will be deemed to be approved (new s 184D). All requests must be submitted by an RTA Request to Keep a Pet form.
Reasonable grounds to refuse a pet (s 184E)include:
•    the rental property is unsuitable for the proposed pet
•    the pet poses an unacceptable risk to health and safety eg venomous pets
•    keeping the pet would breach laws, by-laws or park rules
•    request exceeds a reasonable number of animals to be kept
•    animal is not a pet
If a pet is allowed reasonable conditions (s 184F) having regard to the type of pet, may be imposed and the tenant is liable for any damage. 
Where the tenancy relates to an apartment, unit or townhouse under the Body Corporate and Community Management Act 1997 or Building Units and Group Titles Act 1980, the tenant will also need body corporate approval. If there is a bylaw prohibiting pets, the landlord will be unable to approve the pet unless the by-law changes.
Approved reasons to end a tenancy
From 1 October 2022 a landlord will only be able to end a tenancy for an approved reason set out in the Act. This will include for:

  • Serious breach caused by the actions of a tenant, occupant or guest
  • Repeated tenant breach of by-laws or park rules
  • The landlord or a relative needs to occupy the rental property
  • Significant repair or renovation is required to be undertaken at the rental property
  • Sale or preparation for sale of the rental property requires vacant possession
  • Planned property redevelopment or demolition
  • Change of use (e.g., move to short-stay accommodation)
  • At the end of a fixed term tenancy,  because it has ended.

Importantly it should be noted that there is no approved reason for a landlord to end a periodic tenancy for no reason.

Provisions for tenants to end a tenancy are also included:

  • Condition of the premises, for example, the rental property is not in good repair, is unfit for human habitation or does not comply with Minimum Housing Standards
  • The owner has not complied with a QCAT repair order to undertake repair or maintenance of the rental property
  • The owner provided false or misleading information about the tenancy agreement or rental property
  • A co-tenant has died
  • Tenants/residents can still issue a without grounds notice of intention to leave but the handover date cannot be before the end of the fixed term agreement

Repairs
A change to the amount a tenant can spend on emergency repairs is increased from 2 weeks to 4 weeks’ worth of rent. Also an agent can carry out emergency repairs to the premises up to a limit of the equivalent of 4 weeks’ rent, then deduct the amount from rent.
A tenant or (with consent) their representative can apply to the tribunal for a repair order.  The tribunal can make any order or direction about the repairs. Orders may include the amount of rent to be paid, or compensation for loss of amenity, termination if repairs not undertaken by a certain date etc.  The repair order is enduring until it is complied with It does not end with a tenancy agreement or the tenants moving.

Over the horizon in 2023

E-conveyancing mandate for Queensland
From 20 February 2023 the Land Title Regulation 2022 requires all instruments capable of lodgement through an Electronic Lodgement Network to be lodged in this mode unless an exemption exists. This means that practitioners should ensure that any contracts of sale due for settlement after 20 February 2023 contain provisions for electronic settlement similar to clause 11 of the REIQ Residential Contracts and clause 13 of the REIQ Commercial Contract.  
The transitional provision for the Regulation is very narrow and only applies if a required instrument  is signed by a party in hard copy before the commencement. This will not capture instruments signed pursuant to contracts signed prior to commencement where the instrument is signed after 20 February 2023. In this case the parties will need to rely upon an exemption in s 4 of the Regulation 
 Full details of the meaning of required instrument and the scope of the exemptions is detailed in the Conveyancing Manual Queensland at [ND.10] in New Developments. 

Expansion of unfair terms regime
Following the last election, a new Bill (Treasury Laws Amendment (More Competition, Better Prices) Bill 2022) was introduced to parliament on 27 September 2022 and passed on 27 October 2022. The Bill extends the unfair terms regime to cover more contracts and increases civil penalties for unfair terms. The Bill is consistent with the previous exposure draft released by the previous government and amends the unfair terms provisions of the Australian Consumer Law (ACL) and the Australian Securities and Investment Commission Act 2001. 
The unfair terms amendments will commence 12 months after assent. The changes will apply to standard form consumer or small business contracts that are made, renewed or varied on or after the commencement. If contracts are only varied, then the changes apply only to the varied terms.
Key changes include:
•    new penalties of $50m or more for beach of the unfair terms prohibitions in the ACL. These provisions prohibit the use of, and reliance on, unfair contract terms in standard form contracts
•    prohibition on the proposal of, use of, application of or reliance on uanfair contract terms in standard form consumer or small business contracts
•    clarifying the powers of a court to make orders to void, vary or refuse to enforce all of part of a contract with an unfair term. Also power to make orders applying to any existing consumer contract/small business contract whether before the court of not, where it contains an unfair term that is the same or substantially similar to a term the court has declared to be an unfair term.
•    expansion of the class of business contract: 
o    ACL – small business contract if one party is a business with less than 100 employees or less than $10 million turnover for the last income year; or
o    ASIC - small business contract if (i) the upfront price does not exceed $5 million, and (ii) at least one party to the contract has less than 100 employees or less than $10 million turnover for the last income year. Part time employees are counted as a fraction of a full-time employee.
•    clarifying that a contract may still be a standard form contract despite there being an opportunity for:
o    a party to negotiate changes that are minor or insubstantial in effect; 
o    a party to select a term from a range of options determined by another party; 
o    a party to another contract or proposed contract to negotiate terms of the other contract or proposed contract.
•    certain clauses are exempted from the unfair contract terms provisions where those clauses are included in standard form contracts in compliance with relevant Commonwealth, state or territory legislation;
•    certain categories of contracts are excluded from the regime, including:
o    the operating rules of licensed financial markets;
o    the operating rules of licensed clearing and settlement facilities; and
o    real time gross settlement systems approved as payment and
o    settlement systems by the RBA; and
•    certain life insurance contracts are exempted from the scope of the unfair contract terms provisions
 
Review of Queensland Property Laws
Early in 2023 the new Property Law Bill, including mandatory seller disclosure will be introduced to parliament. Extensive stakeholder consultation has occurred during 2021 and 2022 with an exposure draft of the Bill released in September for further public consultation. The likely commencement date will be late in 2023 or early 2024 allowing a long period for education and updating of forms and the standard contract. Significant changes to conveyancing practice are likely, as well as new versions of the standard contracts and commentary will be released once the legislation is introduced to parliament.
As part of the ongoing review of Qld Property Laws the government is continuing to engage with stakeholders in relation to changes to community title laws. Some changes recommended by the QUT Review were enacted in 2021 but other recommended changes related to bylaws, pets, parking, smoking and termination of schemes are yet to be released for comment.
Stakeholder feedback was recently requested in relation to possible reforms of off the plan sales including: 

  • use of sunset clauses by property developers to terminate contracts where the contract is not settled within a specified timeframe, and 
  • early release of buyers’ deposits to property developers

Consultation closed on 14 September 2022 and no results have been released.
 

Sharon Christensen
By Sharon Christensen
Gadens Professor in Property Law at the Queensland University of Technology

Sharon is the Gadens Professor in Property Law at the Queensland University of Technology and consultant to Gadens. She is an expert in all facets of property law with a special focus on land contracts, leasing and body corporate law and is widely regarded as one of Australia’s leading property law academics, which is further enhanced by her solid industry experience. She is also the author of several of the leading texts in Queensland on aspects of property law.

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