The truth will sell: what you need to know about Queensland's seller disclosure regime for property sales

What you need to know

• The Property Law Act 2023 (Qld) will soon take effect.

• A major change introduced by the new Act is the establishment of a seller disclosure regime, which imposes an increased cost burden and risk on sellers.

• From 1 August 2025, sellers will be required to provide buyers with a Seller Disclosure Statement before the buyer enters into a contract and must include relevant information about the property being sold.

• There are limited exceptions to the regime, and there may be consequences, including termination of the contract, for non-compliance with the regime.

Background

The Property Law Act 2023 (Qld) (Act), which will take effect on 1 August 2025, marks one of the most significant changes to Queensland’s property law landscape in many years.  This new legislation replaces the 50 year old Property Law Act 1974 (Qld) with a modernised and revised framework.

The Act is the culmination of extensive consultation and review over many years, taking into account practical issues faced by practitioners and considering issues raised by case law, as well as the legal position from other states and countries.

A major change introduced by the Act is the establishment of a seller disclosure regime in Queensland.  While many other states have had such a regime in place for some time, this concept is a pivot to existing practices in property sales in Queensland, as previously, sellers were only required to disclose a limited number of matters to buyers before entering into a contract.

Summary of Seller Disclosure requirement

From 1 August 2025, sellers will now be required to provide buyers with a Seller Disclosure Statement before the buyer enters into a contract.  This Seller Disclosure Statement must include relevant information about the property being sold, including:

• Details of all encumbrances (whether registered or not).
• The zoning classification of the property.
• Details of any residential tenancy agreements.
• Details of the most recent rates and water assessments.
• Information regarding any potential issues that could affect the property, including:
  • potential resumption for transport infrastructure
  • contamination
  • tree orders
  • heritage listing
  •  owner builder work. or
  • notices given by the local government.
• Copies of the title search, registered plan, and any other notice required at law or disclosed in the Seller Disclosure Statement (known as certificates).
• For lots in community titles schemes, the community management statement and a body corporate certificate.

For community titles scheme lots, the requirement to provide the body corporate certificate will replace the existing requirement to provide a section 206 disclosure statement.  However, this remains a document that needs to be provided by the body corporate.

Interestingly, there is currently no obligation to disclose any history of flooding related to the property, which is surprising given the potential impact a flood event could have on a buyer.

The Seller Disclosure Statement must be signed by the seller or their agent before it is given to the buyer.  It is assumed that the courts would form the view that this is a strict requirement, following the decision in Pazcuff v Farmilo [2010] 2 Qld R 268.

Limited exceptions may apply

There are limited exceptions to the application of the regime.  These exceptions include:

• contracts between related parties
• transactions where a government body is the buyer
• boundary re-alignment or transfers between co-owners
• contracts formed on the exercise of an option, and
• properties with a sale price exceeding $10 million.

Some exceptions only apply if the parties have waived their rights; in those cases, these exceptions are not automatic.

For options, the exception applies only if the buyer is the same as the grantee who entered into the option agreement. If the buyer has nominated another party, additional disclosure must be provided before to the nominee exercising the option.

Non-compliance consequences

If the seller has not provided:

• the Seller Disclosure Statement, or
• all required certificates with the Seller Disclosure Statement, or
• an inaccurate Seller Disclosure Statement, or
• a Seller Disclosure Statement that is not substantially complete,

before the buyer entered into the contract, the buyer may be entitled to terminate the contract.

If termination occurs because the seller failed to provide the Seller Disclosure Statement or a required certificate is missing, it is irrelevant whether the buyer would have been affected by that omission.

However, if termination is based on inaccuracies or non-completion, the buyer must demonstrate the following before it can lawfully terminate the contract:

1. the inaccuracy or non-completion relates to a material matter affecting the property.
2. the buyer was not aware of the correct state of affairs at the time of signing the contract; and
3. had the buyer known the true state of affairs, they would not have signed the contract.

Implications for sellers

Sellers face an increased burden and risk due to the new Seller Disclosure Statement requirements, which include:

• Increased costs – Sellers will now need to order a number of searches from authorities prior to entering into a contract, which were not previously required.  The costs for an average property could easily range from $200.00 to $300.00.
• Delays in signing contracts – Contracts cannot be signed until an accurate Seller Disclosure Statement is provided. To ensure compliance, sellers cannot simply order the required information at the commencement of a marketing campaign and leave it on file; the information must be current. As a result, the searches are likely to be ordered only when the seller attracts interest in the property to avoid incurring multiple search fees, which may cause a delay in execution while search results are waiting to be received.
• Delays from authorities or body corporates – A number of authorities still process searches manually, which can take time. With the expected influx of search requests from 1 August 2025, further delays are expected. In addition, body corporates may differ in their ability to provide the more comprehensive information required by the new body corporate certificate, which is significantly more comprehensive than the previous section 206 disclosure statement.Delays are very likely, particularly with self-managed body corporates.
• Change of mind termination - Using a non-compliant or missing Seller Disclosure Statement to facilitate a contract termination for a buyer’s change of mind—similar to what was experienced under the repealed Property Agents and Motor Dealers Act 2000 (Qld), where terminations were seen for minor compliance matters.

These changes may also result in real estate agents in Queensland shifting responsibilities for preparing contracts back to solicitors, as is common in the other states, due to the increased risk and legal knowledge need to comply with the new requirements.

Want to know more?

This article is the first in a three part series summarising key changes implemented by the Property Law Act 2023 to property transactions in Queensland – please subscribe to make sure you don’t miss the remaining articles in the series.