When selling land in Queensland, particularly off-the-plan subdivisions, understanding the latest legal requirements is essential. Recent legislative changes have strengthened buyer protections, especially regarding sunset clauses, disclosure requirements, and trust account rules. Whether you’re a developer or a seller, staying compliant with these laws is crucial to avoid legal risks and ensure a smooth transaction.
Sunset clauses in off-the-plan land sales
A sunset clause sets a deadline for settlement in an off-the-plan land sale contract. If the property is not registered by that date, the seller may seek to terminate the contract. However, under new laws introduced on 22 November 2023, sellers can only terminate using a sunset clause in limited situations:
- with the written consent of the buyer
- under an order of the Supreme Court
- in another situation prescribed by regulation
These reforms apply to all existing and new off-the-plan land contracts that were signed but not settled by 22 November 2023.
Disclosure requirements for sellers
Before entering into a contract for a proposed lot, sellers must provide buyers with a signed disclosure statement and a disclosure plan. These documents outline key details about the property, including:
- dimensions and total area
- any planned earthworks during development
- the lot’s proposed orientation
A registered cadastral surveyor must prepare these documents, and any changes must be disclosed to buyers as soon as possible after the proposed lot is registered.
Maintaining transparency with buyers
Open communication with buyers throughout the contract process is key to preventing disputes. This includes engaging in reasonable negotiations, especially when property values fluctuate or issues arise, such as shortages of skilled tradespeople.
Trust account rules for deposit payments
Under Queensland law, buyers must pay any deposit for an off-the-plan property directly into a trust account managed by:
- a real estate agent
- a law practice
- the Public Trustee
Sellers cannot access deposits before settlement, and failure to comply with these rules may result in penalties, including fines of up to $32,260 or one year of imprisonment.
Legal consequences of breaching trust account obligations
Legislative changes confirm that deposits cannot be accessed early by sellers. Deposits held under off-the-plan contracts can only be released at settlement or if the contract otherwise finalises, entitling the seller to the deposit. This is reinforced by amendments to multiple property laws, including the Land Sales Act 1984 and the Body Corporate and Community Management Act 1997.
When buyers can terminate a contract
Buyers have a right to terminate the contract if they experience material prejudice due to changes in the disclosure documents. This means:
- they must be informed of any changes affecting the land’s state
- they must prove that the change significantly disadvantages them (e.g., a reduced lot size)
Buyers can terminate either:
- within 30 days of receiving notice of the change, or
- before the transfer of ownership takes place, whichever is sooner.
Key considerations for small-scale developers
For small-scale developers working on five subdivisions or fewer, some of these rules may not apply. However, disclosure obligations and trust account requirements remain critical, and sellers must ensure compliance with Queensland property laws.
Changes to land sales laws and their impact
The new regulations introduced on 22 November 2023 aim to create a fairer process for buyers of off-the-plan land. The Queensland Government intends to review these reforms within one to two years to assess whether additional measures are needed to protect buyers of community title properties.
Next steps for property sellers and developers
If you are selling subdivided land or planning an off-the-plan sale, it is essential to:
- understand and comply with the new sunset clause rules
- ensure all required disclosure documents are accurate and up to date
- follow trust account requirements for deposit handling
- communicate openly with buyers to maintain transparency
For expert legal advice on navigating Queensland’s land sales laws, contact Ensure Legal today. Our experienced team can help you ensure compliance and avoid potential legal risks in your property transactions.
