Queenslanders have now received their first glimpse of Queensland’s proposed new property law regime with the recent release of the public exposure draft of the Property Law Bill 2022.
If passed, the Bill will repeal and replace the nearly 50-year-old Property Law Act 1974 (Qld) with a new property law regime intended to modernise property law in Queensland. In particular, the Bill aims to repeal outdated clauses in its predecessor and include more contemporary language and provisions which better reflect current commercial practices.
The Bill is based upon 232 recommendations by the Queensland University of Technology following its review of the Property Law Act at the request of the State’s Attorney-General in 2013. The Bill is in its very early consultation stages, with the Government having just completed the process of receiving submissions from the public and stakeholders to inform its final policy positions on the Bill.
As the Bill will operate as a full replacement of the Property Law Act, it includes a vast array of minor and major proposed changes to the existing regime, three of the noteworthy changes proposed are:
Limitation Periods for deeds: The time limitation for an action based upon a deed will be reduced from 12 years to six years.
We say: Currently, the time limitation for an action based upon a contract is six years and based upon a deed is 12 years. The United Kingdom has previously considered shortening the limitation period for deed (but has not yet) and New Zealand reduced it to six years in 2010. Other jurisdictions in Australia have currently retained 12-15 year limitation periods.
There are various other reasons to use a deed instead of an agreement (or vice versa), but shortening the limitation period will take away one of the main distinctions between the two and one of the key benefits in using a deed as opposed to an agreement.
It appears from the consultation draft of the Bill that the new limitation period is intended to only apply to new deeds, and is not proposed to affect the limitation periods under existing deeds or variations of them.
The final Bill will may ultimately look quite different to the current draft, however the exposure draft has provided an interesting glimpse of the ways in which Queensland’s property law regime is likely to change. The property industry will continue to monitor the Bill very closely as it progresses towards its final form and we will continue to provide updates regarding any key changes.
Lease Assignments: It is proposed that a tenant and any guarantor of the tenant’s obligations will be released from liability under the lease following an assignment by the tenant, and a subsequent assignment to a third tenant. The release relates to any breach by the subsequent (ie. third) tenant.
We say: The proposed provision cannot be excluded by contract. Landlords considering a request from a tenant for the assignment of the lease to a new tenant will need to ensure they are satisfied with the strength of the covenant form the new tenant and any security provided.
Seller Disclosure Statements: The Government intends to also include a new statutory disclosure regime for sellers. The proposed regime was the subject of a separate, earlier, public consultation.
We say: Sellers of land would be required to disclose prescribed information about the property to a prospective Buyer (such as basic searches and important information), including by issuing a Disclosure Statement and relevant Certificates. This is common in other States, but a broad disclosure obligation has not been imposed in Queensland for transactions other than “off-the-plan” or community title scheme sales.
If you are interested in learning more about the proposed changes, feel free to reach out to us.