Chapter 5 Sale of lots

This chapter applies to the sale of a lot intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed regardless of where the contract for the sale was entered into if, when the proposed lot becomes a lot, it will be situated in Queensland.

In this chapter—

attach...

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disclosure statement means a statement complying with section 213 (2) to (4).

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residential property see the Property Occupations Act 2014, section 21.

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(1) This section applies if a lot is intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed.

(2) In this chapter, a reference to a disclosure statement for the lot includes a reference to the prescribed documents accompanying the statement for the lot.

(3) In this section—

prescribed documents, accompanying a disclosure statement, means the documents mentioned in section 213 (2)(a)(ii), (f) and (fa).

(1) This section applies in relation to a provision of part 1 or 2 that refers to—

(a) a thing required or permitted to be done by or in relation to a buyer or seller of a lot or proposed lot; or

(b) a thing having been done by or in relation to a buyer or seller of a lot or proposed lot.

(2) The thing may be done, or the thing may have been done, by or in relation to the buyer or seller either—

(a) personally; or

(b) through an agent who is authorised to act for the buyer or seller in relation to the thing.

Part 1 Existing lots

(1) This section applies if—

(a) the seller is the original owner for the community titles scheme; and

(b) the buyer reasonably believes—

(i) the contribution schedule lot entitlements for the lots included in the scheme are inconsistent with the contribution schedule principle on which they were decided; and

(ii) the buyer would be materially prejudiced if compelled to complete the contract.

(2) Subject to subsection (3), the buyer may terminate the contract at any time before it settles by giving signed, dated notice of termination to the seller.

(3) The termination must happen not later than 30 days, or a longer period agreed between the buyer and seller, after the buyer’s copy of the contract is received by the buyer or a person acting for the buyer.

(4) The notice of termination must state that the contract is terminated under this section.

If the buyer terminates the contract under this part, the seller must repay to the buyer any amount paid to the seller towards the purchase of the lot the subject of the contract within 14 days after the termination.

Part 2 Proposed lots

Division 1 Preliminary

In this part—

cadastral surveyor see the Surveyors Act 2003, schedule 3.

law practice means any of the following, within the meaning of the Legal Profession Act 2007, that has an office in Queensland—

(a) an Australian legal practitioner who is a sole practitioner but not a barrister under that Act;

(b) a law firm;

(c) an incorporated legal practice;

(d) a multi-disciplinary partnership.

prescribed trust account, for a recognised entity, means—

(a) if the recognised entity is a law practice—a trust account kept by the practice under the Legal Profession Act 2007; or

(b) if the recognised entity is the public trustee—a common fund held by the public trustee under the Public Trustee Act 1978; or

(c) if the recognised entity is a real estate agent—a trust account kept by the agent under the Agents Financial Administration Act 2014.

proposed lot means a lot intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed.

public trustee means the public trustee under the Public Trustee Act 1978.

real estate agent means a real estate agent carrying on business as a real estate agent under the Property Occupations Act 2014.

recognised entity means any of the following—

(a) a law practice;

(b) the public trustee;

(c) a real estate agent.

Division 2 Basic limitation on sale of proposed lots

(1) This section applies to a contract entered into by a person (the seller) with another person (the buyer) for the sale to the buyer of a lot intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed.

(2) The contract is taken to include a term (the deemed term) providing that, despite any other term of the contract, settlement must not take place earlier than 14 days after the seller gives advice to the buyer that the scheme has been established or changed.

(3) The deemed term has priority over any other term of the contract relating to settlement.

(4) Without limiting subsection (3), any notice the seller gives to the buyer is void to the extent it is inconsistent with the deemed term.

(1) This section applies to a contract entered into by a person with another person (the buyer) for the sale to the buyer of a lot intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed.

(2) When the contract is entered into there must be a proposed community management statement for the scheme as established or changed.

(3) The buyer may terminate the contract if—

(a) there has been a contravention of subsection (2); and

(b) the contract has not already been settled.

Division 3 Statements about proposed lots

(1) Section 213, as modified by this section, applies if a person grants an option (the option) to another person—

(a) to purchase a proposed lot; or

(b) to sell a proposed lot.

(2) For subsection (1)—

(a) section 213 (1) requires the giving of a disclosure statement in relation to the option as if a reference to a contract for the sale of a proposed lot being entered into were a reference to an option to purchase or sell the proposed lot being granted; and

(b) any right of termination under section 213 relating to the disclosure statement applies in relation to—

(i) the option; and

(ii) a contract entered into by the seller and buyer for the sale to the buyer of the proposed lot arising from the option.

(3) If the seller and buyer enter into a contract for the sale to the buyer of the proposed lot arising from the option, section 213 (1) does not require the giving of a disclosure statement in relation to the contract for the sale.

(4) If the buyer is not a party to the contract for the sale of the proposed lot arising from the option, the seller must comply with section 213 before entering into the contract for the sale.

(5) In this section—

buyer means the person who is granted an option to purchase, or grants an option to sell, the proposed lot.

seller means the person who grants an option to purchase, or is granted an option to sell, the proposed lot.

(1) Before a contract (the contract) is entered into by a person (the seller) with another person (the buyer) for the sale to the buyer of a proposed lot, the seller must give the buyer a disclosure statement.

(2) The disclosure statement—

(a) must—

(i) identify the proposed lot; and

(ii) be accompanied by a disclosure plan, complying with section 213AA, for the proposed lot; and

(iii) state the date by which the seller must settle the contract for the sale of the proposed lot as provided under section 217B; and

(b) must state the amount of annual contributions reasonably expected to be payable to the body corporate by the owner of the proposed lot; and

(c) must include, for any engagement of a person as a body corporate manager or service contractor for the scheme proposed to be entered into after the establishment of the scheme, or proposed to be continued or entered into after the scheme is changed—

(i) the terms of the engagement, other than any provisions of the code of conduct that are taken to be included in the terms under section 118; and

(ii) the estimated cost of the engagement to the body corporate; and

(iii) the proportion of the cost to be borne by the owner of the proposed lot; and

(d) must include, for any authorisation of a person as a letting agent for the scheme proposed to be given after the establishment of the scheme, or proposed to be continued or given after the scheme is changed, the terms of the authorisation; and

(e) must include details of all body corporate assets proposed to be acquired by the body corporate after the establishment or change of the scheme; and

(f) must be accompanied by—

(i) the proposed community management statement; and

(ii) if the scheme to be established or changed is proposed to be established as a subsidiary scheme—the existing or proposed community management statement of each scheme of which the proposed subsidiary scheme is proposed to be a subsidiary; and

(fa) must be accompanied by a copy of any building management statement, proposed to be registered under the Land Title Act 1994, that would apply to the scheme land after the establishment of the scheme or after the scheme is changed; and

(g) must identify the regulation module proposed to apply to the scheme; and

(h) must include other matters prescribed under the regulation module applying to the scheme.

(3) The disclosure statement must be signed by the seller.

(4) The disclosure statement must be substantially complete.

(5) If the contract has not already been settled, the buyer may terminate the contract if the seller has not complied with subsection (1).

(6) The seller does not fail to comply with subsection (1) merely because the disclosure statement, although substantially complete as at the day the contract is entered into, contains inaccuracies.

(1) A disclosure plan may comprise 1 or more documents that contain—

(a) for a proposed lot intended to be a building format lot—the building format lot particulars; or

(b) for a proposed lot intended to be a volumetric format lot—the volumetric format lot particulars; or

(c) for a proposed lot intended to be a standard format lot—the standard format lot particulars.

Example of a document that may comprise or form part of a disclosure plan—

a draft plan of survey

(2) A disclosure plan must be prepared by a cadastral surveyor.

(3) In this section—

appropriate contour intervals means contour intervals of not more than—

(a) for a proposed lot of not more than 2,000m ² —50cm in height; or

(b) for a proposed lot of more than 2,000m ² —1m in height.

building format lot particulars, for a proposed lot intended to be a building format lot, means the following—

(a) the proposed number of the lot;

(b) the total area of the lot;

(c) identification of any parts of the lot proposed to be outside the building in which the lot is proposed to be located, including any proposed balcony, courtyard or carport;

(d) the floor level in the building in which the lot is proposed to be located;

(e) identification of other lots and common property proposed to be on the same floor level in the building in which the lot is proposed to be located;

(f) identification of the proposed orientation of the lot by reference to north.

existing surface contours, of a proposed lot intended to be a standard format lot, means the surface contours of the lot at the time the disclosure plan for the lot is prepared.

standard format lot particulars, for a proposed lot intended to be a standard format lot, means the following—

(a) the proposed number of the lot;

(b) a description of the dimensions of the lot as bearings and distances;

(c) if the seller of the lot intends that before the contract is settled, a building be constructed on the lot by the seller, or by another person who is not the buyer under an arrangement procured by the seller—

(i) the location of the building on the lot; and

(ii) the total area, and number of levels, of the building; and

(iii) identification of any features proposed to be constructed on the lot, including, for example, any proposed driveway, carport, courtyard or pergola;

(d) identification of the proposed orientation of the lot by reference to north;

(e) if there is operational work for the lot—

(i) contour maps of the lot showing the surface contours, with appropriate contour intervals, as at the completion of the work; and

(ii) the location of any retaining walls that are part of the work; and

(iii) the height of any retaining walls that are part of the work or, if the height varies across the length of the wall, the height of the lowest and highest points of the wall and the average height of the wall; and

(iv) the areas of the lot to be cut or filled as part of the work; and

(v) the following information about any fill that is part of the work—

(A) the depth of the fill;

(B) whether the compaction of the fill will be done in accordance with Australian Standard AS 3798-2007, and the level of inspection and testing services carried out;

(C) if the compaction of the fill will not be done in accordance with that Australian Standard, the nature of the departure from the standard;

(f) if there is no operational work for the lot—contour maps of the lot showing the existing surface contours, with appropriate contour intervals.

volumetric format lot particulars, for a proposed lot intended to be a volumetric format lot, means the following—

(a) the proposed number of the lot;

(b) an isometric representation of the lot;

(c) the area of the projected footprint of the lot;

(d) the level of the ground surface in approximate values for illustrating the location of the lot in relation to that level;

(e) identification of the proposed orientation of the lot by reference to north;

(f) if the lot is proposed to contain a building or be located in a building—

(i) the floor level on which the lot is proposed to be located; and

(ii) identification of other lots and common property proposed to be on the same floor level in the building.

(1) This section applies if the contract has not been settled, and—

(a) the seller becomes aware that information contained in the disclosure statement was inaccurate as at the day the contract was entered into; or

(b) the disclosure statement would not be accurate if now given as a disclosure statement.

(2) The seller must, at least 21 days before the contract is settled, give the buyer a further statement (the further statement) rectifying the inaccuracies in the disclosure statement.

(3) The further statement must—

(a) be signed by the seller; and

(b) to the extent, if any, the statement rectifies inaccuracies in the building format lot particulars, volumetric format lot particulars or standard format lot particulars mentioned in the disclosure statement—be certified as accurate by a cadastral surveyor.

(4) The buyer may terminate the contract if—

(a) it has not already been settled; and

(b) the buyer would be materially prejudiced if compelled to complete the contract, given the extent to which the disclosure statement was, or has become, inaccurate; and

(c) the termination is effected by written notice given to the seller within 21 days, or a longer period agreed between the buyer and seller, after the seller gives the buyer the further statement.

(5) Subsections (1) to (4) continue to apply after the further statement is given on the basis that the disclosure statement is taken to be constituted by the disclosure statement and any further statement.

(6) If the seller fails to comply with this section, the buyer may terminate the contract by written notice given to the seller if—

(a) the contract has not already been settled; and

(b) the buyer would be materially prejudiced, if compelled to complete the contract, given the extent to which the disclosure statement was, or has become, inaccurate.

This division applies as if a reference in section 214 to a disclosure statement included a reference to a copy of any building management statement given to the buyer under section 213 (2)(fa).

The disclosure statement, and any material accompanying the disclosure statement, and each further statement and any material accompanying each further statement, form part of the provisions of the contract.

The buyer may rely on information in the disclosure statement and each further statement as if the seller had warranted its accuracy.

The buyer may terminate the contract if—

(a) it has not already been settled; and

(b) at least 1 of the following applies—

(i) the community management statement recorded for the scheme on its establishment or change is different from the proposed community management statement most recently advised to the buyer;

(ii) a community management statement, to which the recorded community management statement mentioned in subparagraph (i) is subject, is different from a proposed or existing community management statement previously advised to the buyer;

(iii) the community management statement most recently advised to the buyer is required under section 66 (1)(da) to explain why the contribution schedule lot entitlements are not equal and does not contain the explanation;

(iv) the community management statement most recently advised to the buyer is required under section 66 (1)(db)(i) to state the contribution schedule principle on which the contribution schedule lot entitlements have been decided and does not include the statement;

(v) the community management statement most recently advised to the buyer is required under section 66 (1)(db)(ii) to explain why the contribution schedule lot entitlements are not equal and does not contain the explanation;

(vi) the community management statement most recently advised to the buyer is required under section 66 (1)(db)(iii) to include sufficient details about the relativity principle to show how individual contribution schedule lot entitlements were decided by using it (the details) and does not include the details;

(vii) the community management statement most recently advised to the buyer is required under section 66 (1)(dc)(ii) to explain why the interest schedule lot entitlements do not reflect the respective market values of the lots included in the scheme and does not contain the explanation;

(viii) information disclosed in the disclosure statement, as rectified by any further statement, is inaccurate; and

(c) because of a difference or inaccuracy under paragraph (b), the buyer would be materially prejudiced if compelled to complete the contract; and

(d) the termination is effected by written notice given to the seller by the buyer not later than the latest of the following—

(i) 3 days before the buyer is otherwise required to complete the contract;

(ii) 14 days after the buyer is given notice that the scheme is established or changed;

(iii) another day agreed between the buyer and the seller.

Division 4 Other grounds for terminating contract

(1) This section applies if—

(a) the seller is intended to be the original owner for the scheme when it is established; and

(b) the buyer reasonably believes either—

(i) the proposed contribution schedule lot entitlements for the lots proposed to be included in the scheme are inconsistent with the contribution schedule principle on which they are proposed to be decided; or

(ii) the proposed interest schedule lot entitlements for the lots proposed to be included in the scheme are inconsistent with the market value principle; and

(c) the buyer reasonably believes the buyer would be materially prejudiced if compelled to complete the contract.

(2) Subject to subsection (3), the buyer may terminate the contract at any time before it settles by giving signed, dated notice of termination to the seller.

(3) The termination must happen not later than 30 days, or a longer period agreed between the buyer and seller, after the buyer’s copy of the contract is received by the buyer or a person acting for the buyer.

(4) The notice of termination must state that the contract is terminated under this section.

(1) This section applies if, other than because of the buyer’s default, the seller has not settled the contract for the sale of the proposed lot before—

(a) if the contract provides for a date by which it must be settled (the sunset date), the earlier of the following—

(i) the sunset date or, if the buyer requests a later date for settlement and the seller agrees to the date, the later date;

(ii) the end of 5 ¹ / ₂ years after the day the contract was entered into by the buyer or, if the buyer requests a later date for settlement and the seller agrees to the date, the later date; or

(b) otherwise—the end of 3 ¹ / ₂ years after the day the contract was entered into by the buyer or, if the buyer requests a later date for settlement and the seller agrees to the date, the later date.

Note—

See section 441 for the particular circumstances in which the period prescribed in subsection (1)(b) is changed.

(2) The buyer may terminate the contract for the sale of the proposed lot by a signed written notice of termination given to the seller before the contract is settled.

Division 5 Miscellaneous provisions

Subdivision 1 Termination

(1) This section applies if a buyer terminates a contract under this part.

(2) The seller must, within 14 days after the termination, repay to the buyer—

(a) any amount paid to the seller or the seller’s agent towards the purchase of the lot; and

(b) any interest that accrued on the amount while it was held by the seller or the seller’s agent.

(3) However, if the amount or interest is held by an entity in a trust account kept as required under an Act, the requirement under subsection (2) applies subject to compliance with the law governing the entity’s trust account.

(4) An amount repayable under subsection (2) may be recovered as a debt.

Subdivision 2 Amounts held in trust accounts

This subdivision applies to the following amounts—

(a) an amount paid towards the purchase of a proposed lot under a contract for the sale of the lot (other than an amount paid at settlement);

(b) an amount paid under another instrument (whether legally binding or not) relating to the sale of a proposed lot.

Examples of instruments for paragraph (b)—

• an option to purchase

• an instrument providing for an expression of interest

(1) The person to whom the amount is paid must pay the amount directly to—

(a) if the contract or instrument states the amount is to be paid to either of the following recognised entities, the recognised entity—

(i) a law practice at its office in Queensland;

(ii) a real estate agent carrying on the business of a real estate agent; or

(b) if paragraph (a) does not apply, the public trustee.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2) An amount paid to a recognised entity mentioned in subsection (1)(a) or (b) must be—

(a) held by the entity in a prescribed trust account; and

(b) dealt with by the entity in accordance with this subdivision and the law governing the operation of the entity’s prescribed trust account.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(3) An amount paid to a law practice under this section is taken to be trust money under the Legal Profession Act 2007, part 3.3.

(1) A recognised entity that is paid an amount under section 218B (1) must hold the amount in the entity’s prescribed trust account until a party to the contract or instrument becomes entitled, under this part or otherwise according to law, to a repayment or payment of the amount.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(2) On a party becoming entitled to a repayment or payment of the amount, the recognised entity must dispose of the amount in accordance with the law governing the operation of the entity’s prescribed trust account.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(3) Subsections (1) and (2) apply despite anything in the contract or instrument under which the amount was paid to the recognised entity.

Note—

See also section 318, which prevents contracting out of a provision of this Act.

(1) A recognised entity that holds an amount paid under section 218B (1) in a prescribed trust account may invest the amount if—

(a) either of the following applies—

(i) the contract or instrument authorises the investment;

(ii) the parties to the contract or instrument give the entity their consent to the investment by signed written notice; and

(b) the investment is carried out in accordance with the law governing the operation of the prescribed trust account.

(2) An amount invested as mentioned in subsection (1) is taken to be an amount in the prescribed trust account.

(3) Any proceeds of an investment of an amount as mentioned in subsection (1) must be paid into the prescribed trust account, unless the proceeds are further invested as mentioned in subsection (1).

Maximum penalty for subsection (3)—200 penalty units or 1 year’s imprisonment.

Subdivision 3 Other provisions

(1) This section applies if an instrument is received from the buyer of a proposed lot as security for the payment of an amount under the contract for the sale of the lot—

(a) by a recognised entity on behalf of the seller; or

(b) by any other person on behalf of the seller; or

(c) by the seller.

Example of an instrument for subsection (1)—

bank guarantee

(2) For subsection (1)(a), the recognised entity must keep the instrument at the prescribed place until—

(a) the instrument is returnable to the buyer according to law; or

(b) the instrument is given to the issuer of the security in exchange for the amount it secures.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(3) The amount given in exchange for the instrument under subsection (2)(b) is trust money.

(4) The amount given must be—

(a) held by the recognised entity who held the instrument in the entity’s prescribed trust account; and

(b) dealt with by the recognised entity in accordance with this division and the law governing the operation of the entity’s prescribed trust account.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(5) For subsection (1)(b), the person must give the instrument directly to a recognised entity.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(6) For subsection (1)(c), the seller must give the instrument directly to a recognised entity.

Maximum penalty—200 penalty units or 1 year’s imprisonment.

(7) If the instrument is given to a recognised entity under subsection (5) or (6), subsections (2), (3) and (4) apply as if the instrument were received from the buyer by the recognised entity on behalf of the seller as provided in subsection (1)(a).

(8) In this section—

prescribed place means—

(a) for a recognised entity that is a law practice—an office of the practice in Queensland; or

(b) for a recognised entity that is the public trustee—an office of the public trustee in Queensland; or

(c) for a recognised entity that is a real estate agent—the office of the real estate agency in which the agent carries on the business of a real estate agent.

In a proceeding for an offence against this part, a copy of a contract or other instrument purporting to relate to the sale or purchase of a proposed lot and produced on behalf of the complainant is admissible in evidence as if it were the original contract or instrument.

(1) If the buyer gives the seller a power of attorney to act for the buyer, the power may be exercised only in ways, and only for purposes, disclosed in a written statement given to the buyer before the power is given.

(2) The statement must include a detailed description of the circumstances in which the power may be exercised.

(3) A power of attorney mentioned in subsection (1), unless it sooner expires, expires 1 year after the scheme is established or changed.

Part 3 Implied warranties

In this part—

lot means—

(a) a lot included in a community titles scheme; or

(b) a lot (a proposed lot) intended to come into existence as a lot included in a community titles scheme when the scheme is established or changed.

This part—

(a) establishes certain warranties that are implied in a contract for the sale of a lot; and

(b) establishes a right to terminate a contract for the sale of a lot.

(1) The warranties and right to terminate established under this part have effect despite anything in the contract or in any other contract or arrangement.

(2) The right to terminate established under this part is in addition to, and does not limit, any other remedy available to the buyer of a lot for a breach of a warranty established under this part.

(1) The warranties stated in this section are implied in a contract for the sale of a lot.

(2) The seller warrants that, as at the date of the contract—

(a) to the seller’s knowledge, there are no latent or patent defects in the common property or body corporate assets, other than the following—

(i) defects arising through fair wear and tear;

(ii) defects disclosed in the contract; and

(b) the body corporate records do not disclose any defects to which the warranty in paragraph (a) applies; and

(c) to the seller’s knowledge, there are no actual, contingent or expected liabilities of the body corporate that are not part of the body corporate’s normal operating expenses, other than liabilities disclosed in the contract; and

(d) the body corporate records do not disclose any liabilities of the body corporate to which the warranty in paragraph (c) applies.

(3) The seller warrants that, as at the completion of the contract, to the seller’s knowledge, there are no circumstances (other than circumstances disclosed in the contract) in relation to the affairs of the body corporate likely to materially prejudice the buyer.

Examples for subsection (3)—

1 An administrator has been appointed under the order of an adjudicator under the dispute resolution provisions.

2 The body corporate has failed to comply with the provisions of this Act to the extent that its affairs are in disarray, records are incomplete and there is no reasonable prospect of the buyer finding out whether the warranty mentioned in subsection (2)(b) has been breached.

(4) For subsection (2), a seller is taken to have knowledge of a matter if the seller has actual knowledge of the matter or ought reasonably to have knowledge of the matter.

(1) The buyer may, by written notice given to the seller, terminate the contract if there would be a breach of a warranty established under this part were the contract to be completed at the time it is in fact terminated.

(2) A notice under subsection (1) must be given—

(a) if the lot is a proposed lot—not later than 3 days before the buyer is otherwise required to complete the contract; or

(b) if paragraph (a) does not apply—within 14 days after the later of the following happen—

(i) the buyer’s copy of the contract is received by the buyer or a person acting for the buyer;

(ii) another period agreed between the buyer and the seller ends.

(3) If the buyer terminates the contract, the seller must repay to the buyer any amount paid to the seller (including the seller’s agent) towards the purchase of the lot the subject of the contract within 14 days after the termination.

Part 4 Costs not recoverable by original owner on the sale of a lot

(1) The original owner of a lot in a community titles scheme must not recover from a buyer of the lot or the body corporate any part of the original owner’s costs incurred, in the original owner control period, in entering into a contract that provides for—

(a) the engagement of a person as a body corporate manager or service contractor; or

(b) the authorisation of a person as a letting agent.

(2) If an amount is given to or accepted by the original owner in contravention of subsection (1), the buyer may recover the amount from the original owner as a debt.

(3) To remove any doubt, it is declared that subsection (1) does not apply to the recovery from the buyer of costs incurred after the buyer becomes the owner of the lot and for which the buyer is liable, under this Act, as a lot owner.