The devil is in the detail: timelines and terms redefined in the new Property Law Act

What you need to know:

• The most significant overhaul of the PLA from its fifty-year-old predecessor is the removal of obsolete provisions and the use of plain language.

• The Property Law Act allows time to no longer be ‘of the essence’ because of an ‘adverse event’ and allows buyers and sellers to extend settlement by five business days without being considered in default.

• With the new provisions in regard to easement covenants, developers can structure long-term easements with positive maintenance obligations binding successors in title with greater confidence; the new easement covenant provisions will apply retrospectively to all existing registered easements.

• Under the PLA, guarantees will now be enforceable if electronically signed, in accordance with the Electronic Transactions (Queensland) Act 2001 and will no longer require a witness.

In addition to new seller disclosure obligations and leasing reforms, the Property Law Act 2023 (Qld) (PLA), which is set to commence on 1 August 2025 after two years or stakeholder consultation and development of supporting materials, introduces other significant beneficial changes.   

Time not always of the essence

Property legal practitioners in Queensland have long recognised that time if ‘of the essence’, meaning strict adherence to deadlines and careful management of extensions before due dates. Recent amendments to the REIQ contracts, primarily due to logistical challenges faced by banks during the COVID-19 pandemic, now allow buyers and sellers to extend settlement by five business days without being considered in default.

The PLA builds on this by allowing time to no longer be of the essence because of an ‘adverse event’.  This prevents a party from being forced to complete settlement when a serious disruption occurs in the community, such as a cyclone, fire, flood, storm, public health emergencies, lawful directions given by a government entity, acts of terrorism, war and explosions or sudden impacts (for example, an aircraft or object from space). To rely on the relief, the affected party must inform the other party as soon as reasonably practicable after the adverse event subsides, explaining how it prevented them from completing the settlement, and give a notice to the other party a notice to complete the contract.

This change aligns Queensland with other modern legislative jurisdictions, introducing a greater commercial fairness by recognising the impact of adverse events on settlement timelines.

Easement covenants

The PLA clarifies that registered easement covenants – whether positive (requiring action) or negative (prohibiting action) – are binding on successors in title unless the covenant is explicitly expressed to be personal to the original grantor or grantee of the easement. Under Queensland common law, enforcing positive obligations - such as expenditure to maintain an easement - against successors has been challenging, as courts have viewed such covenants as personal to the original party.  In contrast, negative or restrictive obligations—such as not obstructing pathways—run with the land.

With the new provisions, developers can structure long-term easements with positive maintenance obligations binding successors in title with greater confidence. Additionally, due diligence on existing easements will need greater scrutiny, as positive rights will now be legally enforceable rather than overlooked. Unlike many other aspects of the PLA, the new easement covenant provisions will apply retrospectively to all existing registered easements and to newly registered easements after the PLA’s commencement.

Limitation Periods for Deeds & Specific performance

The PLA amends s 10 of the Limitation of Actions Act 1974 (Qld) reducing the time period an bringing an action (such as a claim) under a deed from 12 years to 6 years. This change aligns the limitation period for deeds with that of contracts, ensuring consistency. Additionally, s 10(6) of the Limitation of Actions Act 1974 (Qld) has always excluded specific performance of a contract from the limitation period, and the PLA now extends this exclusion to deeds as well.

The reform harmonises limitation periods in Queensland for contracts and deeds, simplifying the process of determining when the limitation period for an action applies.  

Guarantees

Guarantees and indemnities are traditional risk mitigation clauses in property contracts and deeds. A guarantee is a promise from one party to answer for the debt or default of another party. In Queensland, guarantees have always required written documentation and the signature of the guarantor to be enforceable. However, disputes often arose regarding the form of a guarantee, specifically whether electronic signatures were permitted or sufficient and whether a guarantee was enforceable if the guarantor’s signature was not witnessed. Disputes occurred even when there was no argument about the original intent of the guarantor to provide assurance.

Under the PLA, guarantees will now be enforceable if electronically signed, in accordance with the Electronic Transactions (Queensland) Act 2001 and will no longer require a witness. This reform is designed to facilitate the enforcement of guarantees in today’s digital age, providing Landlords with greater certainty in enforcing director guarantees of Tenant entities under leases.

Modernisation

Perhaps the most significant overhaul of the PLA from its fifty-year-old predecessor is the removal of obsolete provisions and the use of plain language. The PLA does not simply update the1974 legislation but completely replaces following over a decade of consultation with academics, legal practitioners, government authorities and key stakeholders in the Queensland property sector. Overall, the PLA facilitates electronic transactions, digital signing and e-conveyancing, uses plain language, and introduces statutory provisions that replace or clarify existing common law positions. For example, s 60 of the PLA expressly abolishes the common law rule of law known in Pigot’s case. This means that a material alteration to a deed does not automatically invalidate the deed, make it voidable or affect any other obligation under the deed.

The PLA aims to create certainty where there was previously uncertainty or a lack of legislative clarity, and it has been generally welcomed by lawyers and the broader property industry.

This article is the final instalment in a three-part series summarising the key changes introduced by the PLA to property transactions in Queensland. In case you missed the first and second articles in the series, you can access here and here.

If you have any questions about the PLA or generally about property transactions in Queensland, please contact the team.