Property Conveyancing

A marina berth in the Whitsundays is a wonderful thing to own. A secure home for your boat, gateway access to the reef and the islands, and no more waitlists or wondering where you’ll moor next season.

But here’s what catches a lot of buyers off guard: buying a marina berth is nothing like buying a house or a block of land. The price tag might look like a straightforward property purchase, but legally, it’s a different animal. If you go in expecting it to work like a normal conveyance, you can get a nasty surprise.

So before you sign anything, let’s walk through what you’re really buying — in plain English.

You’re not buying the water — or the land under it

When you buy a house, you usually get freehold title: you own the land, full stop. A marina berth almost always works differently.

Marina berths in Queensland typically sit on leasehold tenure. The land and tidal water a marina occupies generally belong to the State of Queensland — the Crown. The State grants the marina operator a head lease, which in many cases is a perpetual lease — broadly, a lease with no fixed end date for as long as the marina continues to meet its conditions.

When you “buy a berth,” you’re usually not buying the marina, and you’re not buying the water. In most cases you’re taking a transfer of a sublease — a slice of that head lease — that gives you the right to use a specific berth, along with the rights and obligations attached to it.

Because tenure structures can vary from one marina to the next, the only way to know exactly what you’re buying is to have the actual documents reviewed.

If the word “leasehold” is new to you, it’s the same principle that underpins property ownership on Hamilton Island. Our guide to buying property on Hamilton Island explains how leasehold titles behave differently from freehold — and a lot of that thinking applies to marina berths too.

The plain-English version of the jargon

A few terms come up constantly in berth transactions. Here’s what they generally mean:

• Head lease — the lease over the land and water the marina occupies, usually between the State of Queensland and the marina operator.
• Sublease (or sub-sublease) — the slice of that head lease that relates to your individual berth. This is the “thing” you’re typically buying.
• Transfer — when you buy a berth, you usually aren’t getting fresh title; you’re stepping into the shoes of the previous holder by taking a transfer of their sublease.
• Consent to transfer — the marina (and sometimes its mortgagee) usually has to approve the transfer before it can go through. More on this below.

Why you can’t just sign and settle

This is the part that surprises people most. With a normal house purchase, once the contract is unconditional, settlement is largely a matter of paperwork between the two sides.

A marina berth usually has an extra gatekeeper: the marina itself.

Because you’re taking over a sublease, the transfer can typically only happen with the marina operator’s consent — and sometimes the consent of any mortgagee over the head lease as well. These consents are often procedural, but they are not optional. No consent, no clear transfer. Skipping or rushing this step is one of the quickest ways a berth purchase goes wrong.

Each marina in the region also runs its own way. The consent requirements, the conditions in the sublease, the fees, and the paperwork can all vary from one marina to the next. A firm that handles these regularly knows what each local marina expects — and that local knowledge saves you time and avoids surprises.

The questions worth asking before you commit

Because a berth is a leasehold interest, the value is in the detail of the sublease. Before you sign, it’s worth getting clear answers on:

• How long is left to run, and what happens at renewal? Some berth subleases have a fixed end date. You want to understand the term and what your renewal rights look like.
• What are the ongoing marina fees? Annual marina fees can be substantial — and they’re separate from the purchase price. Factor them into your budget from day one.
• What does the sublease actually allow? Restrictions on vessel size, sub-letting your berth, liveaboard arrangements, and use can all be baked into the lease conditions.
• Are there any outstanding obligations? Unpaid fees or unmet conditions attached to the berth are exactly the kind of issue you want flagged early — before they become yours.

This is the same careful, read-the-fine-print mindset that pays off in any property purchase. If you’re weighing up a berth as part of a broader property move, our article on easements and how rights over land work is a useful companion read — not because an easement and a berth sublease are the same thing, but because both are good examples of how the detail of a legal interest, rather than the headline price, is what really matters.

What this means for you

Buying a marina berth in the Whitsundays is a genuinely great move for a lot of boat owners. But it’s a transaction where the legal structure matters far more than the size of the cheque.

The simple takeaway: don’t treat a berth like a normal property purchase, and don’t use a lawyer who’s never done one. The leasehold structure, the consent process, and the marina-specific conditions are all things you want handled by someone who’s been through it many times before.

How PD Law can help

Marina berths are one of our specialist areas — and they’re a genuine point of difference for us. We handle berth transactions across the Whitsundays regularly, we know the consent requirements of each local marina, and we know exactly where these deals can come unstuck.

We’ll review and explain the sublease, manage the consent process with the marina, handle settlement from documentation through to lodgement, and keep you updated the whole way — most of it online and over the phone, so it fits around your life. You can see more on our marina berths and leasehold property page, and if you’ve got specific questions, our marina berth FAQs cover the common ones.

Let’s talk berths

Thinking about buying or selling a marina berth in the Whitsundays? Give us a call on 07 4946 6670 — we know this market inside out, and there’s no obligation, just a friendly chat. You can also book a time online whenever suits you.

Found a home you love? Before you sign anything, there’s a document that deserves a proper read — the Seller Disclosure Statement. The good news is it exists to protect you. The even better news is it’s not nearly as complicated as it looks once someone walks you through it.

If you’re buying a house, townhouse, or unit anywhere in the Whitsundays, this is one of the most important pieces of paper you’ll see. So let’s go through what it is, what’s inside it, and what to do if something doesn’t add up.

First, why does this document exist?

For decades, buying property in Queensland ran on a simple, slightly brutal idea: buyer beware. If you didn’t dig up a problem with the property yourself before you signed, that problem was now yours.

That changed on 1 August 2025, when the Property Law Act 2023 (QLD) introduced a mandatory seller disclosure scheme. We covered the full picture of these reforms in our guide to what the Property Law Act 2023 means for you, but here’s the short version: the seller now has to do some of the homework and hand the results to you before you sign.

The seller does that through a completed Form 2 Seller Disclosure Statement, plus a bundle of supporting certificates. You get all of it upfront — not after you’re locked in.

What you’ll actually find inside the Form 2

The Seller Disclosure Statement is designed to give you a clear snapshot of the property. It’s reasonably detailed, but it breaks down into a few plain-English chunks.

The basics about the property. The seller’s name, the address, the lot and plan description, and whether the property is part of a community titles scheme (think units, townhouses, or anything with a body corporate). If there’s a body corporate, that’s a flag to look closely at levies and scheme rules.

Encumbrances — things that “come with” the land. This is the part most buyers skim and shouldn’t. An encumbrance is basically a right or claim someone else has over the property. It might be an easement (a right for someone to use part of the land, like a shared driveway or a drainage line), or a statutory right that won’t be cleared at settlement. If you’ve not come across these before, our explainer on how easements can affect your property rights is worth five minutes of your time.

Rates and services information. Council rates and water charges so you know the ongoing costs.

Notices and orders. Whether there are any unresolved show cause or enforcement notices hanging over the property under planning or building laws — for example, building work that was never properly approved.

Pool safety. If there’s a pool, whether there’s a valid pool safety certificate. This still trips people up — we wrote about pool safety certificates and what buyers’ lawyers look for if you want the detail.

Alongside the Form 2, the seller must provide prescribed certificates — things like a title search and a registered survey plan. For a unit or townhouse, that extends to the community management statement and a body corporate certificate.

The plain-English translations you’ll want handy

A few terms come up again and again. Here’s what they actually mean:

• Title search — a check of who legally owns the property and whether anything is registered against it.
• Easement — a right someone else has to use part of your land for a specific purpose (a driveway, pipes, power lines).
• Encumbrance — any debt, claim, or right registered against the property that affects it.
• Community titles scheme — the structure behind units and townhouses, run by a body corporate that manages shared areas and charges levies.

If a property comes with a body corporate, those levies matter a great deal — and they can climb. Our piece on getting on top of body corporate levies explains why it pays to ask questions early rather than be surprised later.

What this means for you — and when you can walk away

Here’s the part that genuinely shifts the balance in your favour.

If the seller doesn’t give you a proper disclosure statement and the required certificates before you sign — or if what they give you is materially incomplete or inaccurate — you may have the right to terminate the contract. In some cases, that right can be exercised right up until settlement.

That’s a powerful protection. But it comes with a catch worth understanding: the right to terminate hinges on the disclosure being materially wrong, and “material” is a judgement call. Not every small error gives you a way out. This is exactly the kind of thing that benefits from a lawyer’s eye before you commit, not after.

So when you receive a Seller Disclosure Statement, the smart move is simple — don’t just file it. Read it, and have it reviewed properly before you sign. A quick check now can save you from a problem you didn’t know you were buying.

How PD Law can help

We handle conveyancing for buyers across Cannonvale, Airlie Beach, Bowen, Proserpine and the wider Whitsundays every week — so we know what a clean disclosure statement looks like and what should make you pause. We’ll go through your Form 2 and certificates with you, explain anything that doesn’t make sense, and make sure you’re protected before you sign. Most of our clients never need to set foot in our office — we handle it online and over the phone. You can see exactly how that works on our residential purchase page and our residential conveyancing page.

Buying your first home? Our free First Home Buyers Pack is a good place to start.

Let’s have a look together

Got a Seller Disclosure Statement in front of you and not sure what you’re reading? Give us a call on 07 4946 6670 — no obligation, just a friendly chat about where you’re at. You can also book a time online whenever suits you.

Buying your first home is exciting — but in Queensland, transfer duty (or stamp duty) can quickly take the shine off. It’s a government tax on property transactions that often runs into tens of thousands of dollars. The good news? From 1 May 2025, eligible first home buyers of new homes or vacant land may pay no transfer duty at all.

This change sounds simple, but the rules are anything but. Between concessions, exemptions, and strict eligibility criteria, even a small paperwork mistake or delay could cost you the savings you were counting on. Worse still, you might not find out until long after settlement, when an unexpected tax bill lands in your letterbox.

What is Transfer Duty Anwyay?

The term stamp duty comes from the old practice of physically stamping documents to show the tax had been paid. Today, it’s officially called transfer duty. This is a tax the Queensland Government charges whenever property changes hands, including land, homes, or other dutiable assets. It applies whether you pay cash, take out a mortgage, or even receive the property as a gift.

Transfer duty is calculated on either the property’s market value or the price you agree to pay, whichever is higher. Even transfers between family members can attract duty, because the tax is based on the property’s value, not just the money exchanged.

So, When Does Transfer Duty Apply?

Transfer duty becomes payable on various property transactions:

• Buying a home – whether it’s an established house, townhouse, or a brand-new build.
• Vacant land purchases – such as blocks of land where you intend to build your first home.
• Investment properties – subject to the standard duty rates, as residential concessions generally don’t apply.
• Family transfers – even if the property is gifted between relatives, duty is usually calculated on market value.

You must pay transfer duty within 30 days from when the liability arises. For most purchases, this means 30 days from contract signing, not settlement date.

2025 Transfer Duty Rates in Queensland

Queensland uses a tiered system where rates increase with property values:

Property Value Range	Transfer Duty Rate / Payable Formula
Up to $5,000	Nil
$5,001 – $75,000	$1.50 for each $100 (or part of $100) over $5,000
$75,001 – $540,000	$1,050 plus $3.50 for each $100 (or part) over $75,000
$540,001 – $1,000,000	$17,325 plus $4.50 for each $100 (or part) over $540,000
Over $1,000,000	$38,025 plus $5.75 for each $100 (or part) over $1,000,000

To illustrate, see the sample calculation below:

Example: Buying a Home for $900,000

Bracket: $540,001 – $1,000,000

Formula: $17,325 + $4.50 for every $100 (or part) over $540,000

1. Amount over $540,000 = $900,000 – $540,000 = $360,000
2. Divide by $100 = 3,600
3. Multiply by $4.50 = $16,200
4. Add base $17,325 = $33,525

✅ Transfer duty payable = $33,525

However, various concessions often reduce or eliminate these standard rates for eligible buyers.

Major Shift: No Stamp Duty for First Home Buyers

The Queensland Government’s May 2025 reforms have brought the most significant transfer duty changes in decades. Eligible first home buyers of new homes and vacant land now pay no transfer duty.

In real terms, first home buyers can save about $9,096 on a median-priced house-and-land package in Queensland. At the higher end of the market, the benefit is even larger, with savings of up to $24,525. To put this into perspective, the REIQ reported Queensland’s quarterly median house price at $812,000 in June 2025 — highlighting just how significant these savings can be when weighed against current property prices.

First Home Concession (New Build) Eligibility

The full transfer duty exemption eliminates duty entirely, but eligibility requirements are strict:

• Age: You must be at least 18 years old.
• First-time status: You must never have owned a residential property anywhere in Australia or overseas, and never claimed the first home vacant land concession.
• Individual purchase: The property must be acquired in your personal name, not through a company or trust.
• New home requirement: The property must be a new home or substantially renovated home that has not been previously occupied.
• Contract timing: Your purchase contract must be dated 1 May 2025 or later.
• Residence obligations: You must move in with your personal belongings within 12 months of settlement and live there as your principal residence for at least 12 consecutive months.
• Property value requirement: If the property is valued between $700,001 and $799,999, you must pay market value to qualify for the concession.

Vacant Land Concessions

If you’re buying vacant land to build your first home, you usually won’t pay transfer duty on the residential part of the land. If the whole property is for residential use, no duty is payable at all. If part of the land is non-residential, you’ll only pay duty on that portion.

To qualify, you need to:

• Buy the land in your own name (not through a company or trust, except in very specific trustee cases).
• Never have claimed a first home vacant land concession before.
• Build only one home on the land and move in within two years.
• Make the home your main residence.
• Ensure the land is empty when you buy it (no existing buildings).
• Pay the land’s market value when required, depending on the purchase price and the date of the contract.

Established Home Purchases

If you’re buying an established home, the first home concession can help reduce or even eliminate transfer duty, provided the property value falls within the eligible range:

• Homes valued up to $700,000 – no transfer duty payable.
• Homes valued between $700,001 and $799,999 – reduced transfer duty applies.
• Homes valued at $800,000 or more – the concession does not apply.

This concession can save first home buyers up to $24,525, making a significant difference to upfront costs.

Additional Transfer Duty Concessions

Home Concession for All Buyers

If you’re not a first home buyer, you can still claim the Home Concession when buying your main residence. It applies to the first $350,000 of the property’s value, which could save you up to $7,175 in transfer duty.

Requirements include:

• Moving into the property within 12 months of settlement
• Living there as your daily residence
• Not leasing, selling, or granting exclusive possession before moving in
• Continuing residence for at least 12 consecutive months after moving in

Foreign Buyer Obligations

Foreign persons acquiring residential property in Queensland face an additional 8% transfer duty surcharge on top of standard rates. This Additional Foreign Acquirer Duty (AFAD) applies even when other concessions are claimed.

Why Expert Legal Help Matters

Transfer duty might look straightforward on paper, but Queensland’s rules are filled with exceptions and potential pitfalls. Professional guidance is essential, especially in these situations:

Mixed Buyer Scenarios

When couples or joint buyers are involved and only one qualifies as a first-home buyer, transfer duty calculations can become complicated. Each person’s share must be calculated separately, and partial concessions may apply. Using a transfer duty calculator can give a rough estimate, but expert advice can prevent unexpected issues.

Documentation and Timing

Concessions rely on precise paperwork submitted correctly and on time. For new homes, vendor statements must confirm the property has never been occupied. Missing or incorrect documentation can invalidate your entire concession claim, costing thousands in lost savings.

Ongoing Compliance

First home concessions come with obligations that extend beyond settlement. For example, if you rent out the property within a year of moving in, you must notify the Queensland Revenue Office to allow a duty reassessment. Failure to comply can trigger penalties and unexpected duty bills.

Valuation Disputes

The tax is calculated on the value of the property that is subject to duty. If the Queensland Revenue Office disagrees with your purchase price, disputes can arise. Legal expertise is often needed to resolve these disagreements effectively.

Common Transfer Duty Mistakes

• Assuming automatic eligibility: Many buyers wrongly assume they qualify. Any previous ownership of residential property, anywhere in the world, disqualifies first home concessions.
• Incomplete documentation: Forms like 1 and supporting paperwork must be submitted with your contract. Missing items can delay settlement or void your claim.
• Misunderstanding residence obligations: Leasing or extended absences may impact concession eligibility and trigger reassessments.
• Payment issues: Transfer duty is due within 30 days of the liability arising. Conveyancing Lawyers like ours can handle calculation, lodgement, and payment. Late payment attracts daily penalties and interest.

Looking Ahead

Queensland’s transfer duty rules keep changing to balance affordability with revenue. First home buyer reforms make it easier to get into your first home, but eligibility is strict and ongoing obligations apply. Knowing both the savings and responsibilities is essential.

Helping You Protect Your Property Investment

Transfer duty is just one part of buying property in Queensland. Errors in calculations, documentation, or compliance can derail purchases or create costly problems later. Given the complexity of current concession rules, professional guidance is invaluable.

At PD Law, we guide clients through Queensland’s evolving transfer duty rules every day. Whether you’re a first home buyer seeking to claim concessions, an investor calculating acquisition costs, or navigating complex mixed-buyer scenarios, our experienced Residential Conveyancing Lawyers provide practical, tailored advice. We help ensure your property purchase runs smoothly from contract to settlement and beyond. Don’t just take our word for it—see what our satisfied clients have to say!

Ready to start? Talk to one of our Cannonvale Lawyers today.

Buying or selling property can already feel complicated. Add in decades-old laws, and it’s no wonder many Queenslanders find the process stressful.

To address this, Queensland property law has undergone its biggest reform in nearly 50 years. The Property Law Act 2023 (the Act), which came into effect on 1 August 2025, replaces the Property Law Act 1974 and introduces a new legal framework for real estate transactions.

These changes modernise conveyancing, create greater transparency, and impose new responsibilities on both sellers and buyers. Whether you are looking to purchase property in Queensland or preparing to sell, understanding these reforms is essential to protecting your rights and ensuring a smooth transaction.

A New Era of Seller Disclosure

A key reform under the new law is the requirement for sellers to disclose certain information to potential buyers. Previously, under the old system of caveat emptor, buyers carried the main responsibility for investigating a property before buying. Since the implementation of the Act, sellers must provide buyers with detailed property information upfront, ensuring transparency and reducing disputes.

Before a contract is signed, sellers are required to provide:

• A completed Form 2 Seller Disclosure Statement
• All prescribed certificates relevant to the property

All property contracts signed on or after 1 August 2025 are subject to this requirement, regardless of the listing date.

The disclosure must include information about:

• Registered and unregistered encumbrances
• Statutory restrictions and heritage listings
• Building notices and compliance issues
• Pool safety certificates or non-compliance notices
• Community title scheme documents
• Environmental protection notices

Documents can be provided in person, by post, email (with consent), or electronically.

Prescribed Certificates Sellers Must Provide

Alongside the disclosure statement, sellers must supply specific certificates. The type of property determines the documents required, but generally they include:

For most properties:

• Title searches and registered survey plans
• Pool safety certificates (if applicable)
• Environmental notices
• Building and construction commission notices
• Heritage documentation

For community title schemes:

• Community management statements
• Body corporate certificates (using new BCCM Form 33)
• Other body corporate documents

In special circumstances:

• Neighbourhood dispute orders under dividing fences legislation
• Transport infrastructure proposals
• Notices of government resumption intentions

Sellers must ensure the information is accurate and current. Outdated or incomplete certificates could expose them to legal risks and allow buyers to terminate contracts.

Greater Buyer Protection

The new disclosure regime significantly strengthens buyer protection. Buyers can now terminate a contract before settlement if:

• The seller fails to provide disclosure documents before signing
• The documents are inaccurate, incomplete, or misleading
• Material facts are withheld that would have influenced the decision to purchase

These rights give buyers confidence that they are making informed decisions and reduce disputes after contracts are signed.

Modernising Conveyancing Practices

The Act introduces a suite of new approved forms for use by lawyers, agents, and property professionals. Beyond Form 2, additional forms now cover:

• Instalment contract default notices
• Mortgagor notification requirements
• Receiver appointment documentation
• Lease breach notices
• Re-entry and lease renewal refusals

To support the new regime, the Real Estate Institute of Queensland (REIQ) has released updated residential and commercial contracts. Instead of multiple versions, there are now just two standard contracts – one for standard properties and one for community title schemes.

Leasing Law Reforms

The legislation also brings important changes to leasing arrangements.

Assignment of lease liability:

• Original tenants and guarantors are now released from liability once an assignee transfers the lease again.
• This is a major shift from the old common law rule where original tenants remained liable indefinitely.

Landlord re-entry procedures:

• Landlords must follow new statutory notice procedures before re-entering premises or refusing a lease renewal.
• Failure to comply could allow tenants or other affected parties to challenge the landlord’s actions in court.

Easements:

• Obligations under registered easements (such as land use or maintenance) now bind successors unless expressly stated otherwise.
• This significantly extends the effect of easements compared to previous law.

Auction Sales and Options

In auctions, the rules change because a buyer is legally bound as soon as the sale is confirmed. Now, before an auction, sellers must give all disclosure documents to every registered bidder.

For option agreements, disclosure must be provided when the option is signed. If the same buyer later exercises the option, no additional disclosure is needed.

Deeds and Commercial Transactions

The Act also impacts commercial transactions:

• For deeds made after 1 August 2025, the time to take legal action is halved—from 12 years to six.
• Partial debt assignments are now permitted, provided debtors are properly notified.

These changes remove some of the traditional advantages of deeds and bring Queensland law into line with modern commercial practices.

Exceptions to Disclosure

While disclosure is now the default, some exceptions apply.

Disclosure may be waived where:

• Contracts are between related parties, and the waiver is in writing
• Government entities are involved
• Specific transaction types fall under exemption categories

However, these exceptions are tightly defined. Sellers should always obtain legal advice before assuming they are exempt. Incorrect assumptions could result in serious compliance issues.

Embracing Digital Practices

The Act recognises that technology is playing a bigger role in property transactions. Disclosure documents can now be provided electronically, provided the buyer consents.

Approved forms are also available digitally, streamlining processes while maintaining legal validity and accessibility.

Professional Responsibility and Risk

The reforms significantly increase compliance obligations for lawyers, conveyancers, and agents. Non-compliance may result in:

• Buyers terminating contracts
• Compensation claims
• Professional liability exposure
• Disciplinary action from regulators

Practitioners must ensure:

• All required certificates are obtained
• Disclosure statements are accurate
• Clients are fully advised on risks and obligations

Implementation and Ongoing Obligations

Ongoing compliance will require:

• Continuous professional development
• Updated internal procedures for firms and agencies
• Regular client education
• Close monitoring of further legislative updates and court interpretations

This is not a temporary reform but a permanent transformation of how property transactions are conducted in Queensland.

Market Impact and Outlook

The Property Law Act 2023 represents Queensland’s commitment to modern, consumer-focused property laws. By prioritising transparency and fairness, the changes are expected to:

• Improve buyer confidence
• Reduce disputes and litigation
• Streamline conveyancing
• Enhance market efficiency

While the transition may initially challenge sellers, buyers, and professionals, the long-term effect is likely to be a stronger and more reliable property market.

We’ve Got You Covered

Our Residential Conveyancing Lawyers are fully up to date with the new requirements under the Property Law Act 2023. We can assist with:

• Preparing seller disclosure statements
• Obtaining prescribed certificates
• Reviewing contracts and compliance
• Managing transactions from start to finish

Whether you are buying or selling property in Queensland, we ensure that your interests are protected and every step complies with the latest legal requirements. Get in touch with one of our Cannonvale Lawyers today.

Sometimes, disputes between co-owners regarding the future of jointly owned property can arise, whether it involves a family home, an investment property, or a piece of land. As such, these disagreements can lead to intricate legal challenges. This article explores the complexities of the forced sale of property in Queensland, focusing on the rights of co-owners, available legal remedies, and the relevant legislation governing these situations.

Understanding Co-Ownership in Queensland

To fully grasp the dynamics surrounding the forced sale of property, it is essential to understand the concept of co-ownership. In Queensland, properties can be co-owned in two primary forms:

(1) as joint tenants; or

(2) as tenants in common.

Joint tenancy is commonly established by couples, where both parties hold equal shares along with rights of survivorship. Conversely, tenants in common may have unequal shares and lack automatic rights of survivorship.

Disputes can arise regardless of the type of co-ownership when one co-owner wishes to initiate a sale while others oppose it. This is where the legal provisions for the forced sale of property become crucial.

The Legal Framework for Forced Sales

The Property Law Act 1974 (Qld) creates a framework and legal process to manage the sale of properties when co-owners are in dispute. Specifically, Section 38 of this Act allows co-owners to petition the court for the appointment of statutory trustees to facilitate the sale of the property, even if not all co-owners consent.

Enforcing rights under Section 38, are not automatic and require order of the Court and in most instances an independent administrator (or trustee for the property) to affect the sale once an order is obtained.

The Process of Forcing a Sale

When a co-owner seeks to compel the forced sale of property, they must follow a specific legal procedure:

1. Application to the Court: The co-owner intending to initiate the forced sale must submit an application to the court under Section 38 of the Property Law Act.
2. Court Consideration: The court will evaluate various factors, including the reasons for the sale, the implications for all co-owners, and any existing agreements or obligations.
3. Appointment of Trustees: If the court approves the application, it will appoint statutory trustees to manage the sale of the property.
4. Sale Process: The appointed trustees will oversee the sale process, including property valuation, marketing, and the eventual sale.
5. Distribution of Proceeds: Once sold, and after the payment of all associated costs including any debts, agents commissions, trustee fees etc, the proceeds will be distributed among the co-owners according to their ownership shares.

Forced Sale of Property: Rights of Co-Owners

While Section 38 of the Property Law Act provides a mechanism for the forced sale of property, it is crucial to recognise that all co-owners retain certain rights throughout this process:

1. Right to Object: Co-owners who oppose the sale have the right to present their arguments to the court.
2. Right to Fair Value: Every co-owner is entitled to receive their equitable share of the property’s value upon sale.
3. Right to Bid: With court approval, co-owners can participate in bidding to purchase the property during the sale process.
4. Right to Information: Co-owners have the right to be informed about the sale process and consulted on significant decisions.
5. Right to Seek Alternatives: Before resorting to a forced sale of property, co-owners may explore alternative solutions, such as buyouts or refinancing options.

Legal Recourse and Considerations

While Section 38 of the Property Law Act offers a powerful tool for resolving co-ownership disputes, other avenues should also be considered:

1. Negotiation and Mediation: Co-owners are encouraged to attempt negotiation or mediation to reach a consensus before pursuing legal action.
2. Buyout Agreements: One co-owner may opt to buy out the other’s share, potentially avoiding the need for a public sale.
3. Partition: In certain situations, particularly with land, the property might be capable of being physically subdivided among co-owners.
4. Co-Ownership Agreements: Establishing a clear, written agreement from the outset can help prevent disputes and outline resolution pathways.

Landmark Cases

Several pivotal cases have shaped the interpretation and application of laws concerning the forced sale of property in Queensland, including:

Simonidis Steel Lawyers Brisbane Pty Ltd v Johnston & Ors [2015] QSC 81

This case reinforced the court’s inclination to approve applications for the forced sale of property. Justice McMurdo indicated that the power granted under section 38, while discretionary, is typically exercised when a co-owner makes a request, highlighting the importance of this remedy as a fundamental aspect of the co-owner’s proprietary interest.

Fleming v Fleming [2016] QSC 215

This ruling solidified the principle that there is “no general defence” against a forced sale application under Section 38, emphasising that unless specific legal or equitable rights are infringed, such applications are likely to be approved.

Implications and Best Practices

The legal framework and case law governing the forced sale of property in Queensland present several important considerations:

1. Power of the Statutory Remedy: Section 38 of the Property Law Act serves as a significant tool for resolving deadlocks in co-ownership situations, with courts generally viewing this remedy favourably.
2. Limited Grounds for Refusal: Although the court possesses discretion, there are few valid grounds for denying a forced sale application, typically relating to pre-existing trusts or fiduciary obligations.
3. Importance of Clear Agreements: Given the court’s inclination to grant forced sale applications, co-owners should establish clear, written agreements at the beginning of their co-ownership. These agreements can detail dispute resolution processes, buyout options, and conditions for sale.
4. Consideration of Alternatives: While the forced sale of property is a powerful legal remedy, it should generally be considered a last resort. Co-owners are encouraged to explore negotiation, mediation, and alternative solutions prior to court involvement.
5. Professional Advice: Given the complexities inherent in property law and the significant implications of forced sales, obtaining professional legal counsel, such as from our expert Residential Conveyancing Lawyers, is vital for all parties involved in co-ownership disputes.

We’re here to help

Section 38 of the Property Law Act is designed to effectively manage co-ownership disputes, emphasising the importance of well-defined agreements and strategic planning. As co-ownership becomes a more prevalent choice for real estate investment and family asset management, it’s crucial to grasp your rights and responsibilities. Although the law allows for forced sales, it should ideally be viewed as a last resort. Engaging in open dialogue and considering alternative solutions can often result in more favourable outcomes for all parties involved.

At PD Law, we recognise that navigating the intricacies of property transactions, including forced sales, can be daunting and stressful. Our experienced Cannonvale Lawyers are committed to providing you with clear guidance and support every step of the way. Whether you’re facing co-ownership challenges or seeking to buy or sell a residential property, we draw on our expertise to help you understand your options and rights. With a focus on delivering exceptional service, we strive to make your transaction as smooth and seamless as possible. Contact us today to discuss your conveyancing requirements and how we can assist you.

The new Property Law Act 2023 passed Parliament on the 25th of October 2023, introducing both minor and major legislative change that aims to simplify, modernise and streamline Queensland’s property Laws. The new Legislation replaces the Property Law Act 1974 which has been operating for more than 50 years. The commencement date of the new Act is set by proclamation and is yet to be confirmed, the delay is to allow for consultation and education before its commencement.

Selling Property – what you need to know

Seller Disclosure Scheme

Unlike other Australian jurisdictions, Queensland has traditionally operated on a “caveat emptor” principle (‘buyer beware’), where buyers bear the responsibility of due diligence on the property they are looking to purchase.
Under the new Seller Disclosure Scheme the seller is obligated to provide a signed disclosure statement in an approved form with certain prescribed certificates to the buyer before the buyer signs the contract, either electronically or physically.

This statutory requirement includes information about:

• the property title;
• planning and zoning;
• rates and water accounts;
• body corporate information ;
• building work;
• infrastructure proposals;
• energy efficiency ;
• environmental issues.

The need to disclose applies to sales of all freehold land, including auctions, with specific exemptions.

The Act grants the buyer a right to terminate the contract at any time before settlement if the seller fails to give a disclosure or gives an inaccurate disclosure;

Enforceability Of Covenants In Easements

Under the current law, a covenant in an easement is not enforceable against future owners unless that owner agrees to be bound. Section 65 of the reformed Act operates in such a way that covenants in registered easements (regardless of whether the covenants are positive or negative) will be binding on future landowners unless the covenants are expressed to be personal.

Section 65 will apply to all easements, regardless of when the easement was entered into or registered and has a retrospective effect.

Benefits Of The New Act in land sales

The new act is expected to bring about several benefits for both buyers and sellers in the property market, such as:

• Reducing the risk of disputes and litigation arising from inadequate or inaccurate information
• Increasing the trust and confidence of buyers and sellers in the property transaction process
• Improving the quality and value of properties in the market
• Enhancing the reputation and professionalism of the real estate industry

The new act is a significant step in the modernisation of property laws in Queensland, and reflects the changing needs and expectations of consumers and the industry.

If you have any questions or need any assistance with your property transactions, please contact our team of experts today.

Hamilton Island, a gem in the heart of the Great Barrier Reef, has always been a favourite destination for both domestic and international tourists. However, like many other tourist hotspots, it faced a significant challenge when the COVID19 pandemic hit. But Hamilton Island has bounced back, demonstrating resilience and adaptability in the face of adversity.

The COVID19 pandemic brought unprecedented challenges to the tourism industry worldwide, and Hamilton Island was no exception. The island, which relies heavily on tourism, saw a significant drop in visitor numbers due to travel restrictions and safety concerns.

Many businesses on the island, from hotels and restaurants to tour operators, felt the impact. Revenue dropped, and many employees found themselves out of work. It was a tough time for the island, but it was also a time of resilience and innovation.

As the pandemic unfolded, businesses on Hamilton Island quickly realised they needed to adapt to survive. They implemented new safety measures, such as increased cleaning and social distancing, to keep visitors & staff safe. They also started offering more flexible booking options to accommodate the uncertainty of travel during a pandemic.

One of the key factors in Hamilton Island’s recovery was the support from the local community. Many locals made a point of supporting local businesses, whether by dining out, booking staycations, or buying local products. This support helped businesses get back on their feet and kept the island’s economy going.

The Australian government also played a crucial role in Hamilton Island’s recovery. It provided financial support to businesses and employees affected by the pandemic, helping them weather the storm. It also launched initiatives to boost domestic tourism, such as the Holiday Here This Year campaign, which encouraged Australians to explore their own backyard and support local tourism.

These initiatives not only helped Hamilton Island recover, but also highlighted the importance of domestic tourism. They reminded Australians of the beauty and diversity of their own country and encouraged them to explore new places and experiences.

Whilst the pandemic was a challenging time for Hamilton Island, it was also a time of learning and growth. The island has shown remarkable resilience and adaptability, and these qualities will continue to serve it well in the future.

As Hamilton Island continues to innovate and adapt, it’s sure to remain a top destination for tourists. Whether you’re planning a family holiday, considering a property purchase, a romantic getaway, or an adventure-filled trip, Hamilton Island has something for everyone.

Are you thinking about venturing into the world of real estate auctions? It’s an exciting and fast-paced environment where properties are bought and sold through competitive bidding. However, before you dive in headfirst, it’s essential to understand the ins and outs of auction etiquette to ensure a successful bidding experience.

In an auction, properties are put up for sale, and potential buyers compete by placing bids. The highest bidder at the end of the auction wins the property.

Real estate auctions offer a unique opportunity to purchase properties, whether you’re a seasoned investor or a first-time buyer, but it’s crucial to familiarise yourself with the fundamentals of real estate auctions.

The Importance of Auction Etiquette

When participating in a real estate auction, proper etiquette is paramount. Understanding and practicing auction etiquette is the key to gaining an edge over your competitors and increasing your chances of securing your dream property. First and foremost, it’s essential that you have pre-approval from your bank to bid at auction if you will be borrowing money to purchase.

Auction etiquette begins with arriving early and registering as a bidder. This allows you to familiarize yourself with the auctioneer, other participants, and the property being auctioned. It’s important to listen carefully to the auctioneer’s instructions and follow them throughout the bidding process.

During the auction, it’s essential to be respectful to other bidders. Avoid making derogatory remarks or engaging in aggressive behaviour. Instead, focus on presenting yourself as a serious and knowledgeable buyer. Maintaining a calm and composed demeanour can help you stand out from the crowd and make a positive impression on the auctioneer.

The Do’s and Don’ts of Auction Etiquette

When attending an auction, it’s important to conduct yourself appropriately. Follow these do’s and don’ts to ensure a positive experience:

• Do arrive early to register and familiarize yourself with the auction process.
• Don’t be afraid to ask questions if there’s something you don’t understand.
• Do pay attention and listen carefully to the auctioneer’s instructions.
• Don’t engage in disruptive behaviour or make derogatory remarks about other bidders.
• Do bid confidently but avoid getting caught up in an emotional bidding war.
• Don’t exceed your predetermined budget.

Common Mistakes to Avoid

Even the most experienced bidders can make mistakes during auctions. Here are some common pitfalls to watch out for:

• Underestimating competition: Always be prepared for fierce competition, especially for highly desirable properties.
• Failure to inspect the property thoroughly: Don’t make the mistake of skipping a comprehensive inspection. Assess the property’s condition to avoid any unpleasant surprises after winning the bid.
• Getting caught up in the moment: Stay calm and composed. Impulsive decisions can lead to regrettable outcomes.

By following these essential tips for auction etiquette, you’ll be better equipped to navigate the real estate auction landscape. Remember to conduct thorough research, be prepared, and practice professionalism at all times. If you require a contract to be reviewed prior to auction, contact our conveyancing team today.

In today’s fast-paced world, where property transactions are happening by electronic means, verification of identity has become more crucial than ever before. It plays a pivotal role not only in preventing fraud but also in ensuring legal compliance.

Identity verification refers to the process of confirming the authenticity of an individual’s identity by verifying the personal information provided by the individual, against identity documents

The Concept of Identity Verification

Identity verification is based on the principle that the identity of the parties involved in a property transaction should be verified to ensure transparency and mitigate the risk of fraudulent activities. By confirming the identity, individuals can have the peace of mind that they are dealing with genuine persons, which ultimately safeguards the interests of both parties and helps to establish trust.

Identity verification involves a combination of manual and automated processes. Initially, individuals are required to provide personal information such as their full name, date of birth, and address.  In addition, individuals are also asked to provide supporting documents such as a driver’s license, passport, or utility bills to further verify their identity.

Why Identity Verification is Crucial

Identity verification is crucial in property transactions due to various reasons. Firstly, it acts as a deterrent against fraud. By verifying the identity of all parties involved, the chances of fraudulent activities are significantly reduced, protecting both buyers and sellers from potential losses.

Secondly, identity verification is essential in ensuring legal compliance. Many jurisdictions have regulations and laws in place that require property transactions to be conducted only with verified identities. Failing to comply with these regulations can lead to penalties and legal implications.

Furthermore, identity verification helps to build trust and credibility among the parties involved in a property transaction. When individuals know that their identities have been verified, they can have confidence in the legitimacy of the transaction and the integrity of the other party. This trust is especially important in high-value transactions where large sums of money are involved.

Identity verification also plays a significant role in preventing identity theft and impersonation. By thoroughly verifying the identity of individuals, it becomes much more challenging for fraudsters to assume someone else’s identity and carry out illegal activities. This not only protects the individuals involved in the transaction but also contributes to the overall security of the property market.

In conclusion, identity verification is a critical process that ensures the authenticity of an individual’s identity in property transactions. It helps to establish trust, prevent fraud, ensure legal compliance, and protect the interests of all parties involved. We have implemented robust identity verification measures, to ensure your transaction can operate with transparency and integrity, fostering a safe and secure environment for buyers and sellers alike.

You may have heard the Latin phrase – caveat emptor – “Buyer Beware”, but when does “Seller Beware” become relevant?

As a seller you must disclose in the Contract all title encumbrances which will remain after settlement, and you must be in a position at settlement to hand over a title free from undisclosed encumbrances to the buyer.   The importance of disclosing encumbrances can’t be overstated.  Failure to disclose unregistered title encumbrances may entitle a buyer to terminate the contract up until settlement, due to the defect in title if an encumbrance is discovered that wasn’t divulged, even if the contract has become unconditional. The buyer may also recover damages, including costs.

Encumbrances don’t always appear on a title search and may not be apparent without diligent searches. Encumbrances are defined in the Contract as “including unregistered and statutory encumbrances” and come in many shapes and forms. They can benefit the land, they can burden the land, can be registered and unregistered. They can be granted through statute or by written agreement.

The most common example of an unregistered title encumbrance is an easement granted by statute to certain suppliers of services for infrastructure required for the maintenance of a home, such as water, electricity, stormwater, internet & telecommunication cabling. Providers such as the local Council, energy companies and telecommunications companies are conferred a right under statute to build and maintain services under or over the land.

As a Seller, how do you avoid making this possibly fatal mistake, leaving yourself open to potential unwanted ramifications when selling your property?  One way is by undertaking a free Dial Before You Dig search for information on the location of underground infrastructure to ensure that you have a comprehensive knowledge and understanding of what services are located on your land which would be the subject of a statutory easement.

In order to best protect your interests as a seller and avoid the effects of non-disclosure, we recommend that all sellers seek advice before entering into a contract.

Out of over 2,500 law firms in the State of Queensland, about 1,200 utilise PEXA, an online settlement platform for property transactions. PD Law now ranks in the top 100 in the State for volume of successful transactions completed under PEXA’s electronic property settlements system, and the top 300 nationally.

“I am so delighted and proud of our team, but I’m actually not surprised” Mel Cox, CEO, director, and co-founder of PD Law said.

“From day one we’ve listened to all stakeholders – buyers, sellers, and agents – and set out to develop a very strong legal project management system.  No matter what the business, if customers continue to get great service and great results, hard work pays off for a business. The results come eventually.”

PD Law, now a full-service general practice law firm, took on its first conveyance in 2007. “We were virtually a start-up then, with [co-founder and director] Stuart and I being the only staff, after having concentrated purely on property development in years prior. We had to get across the law and be smart with time and resources, which meant we needed immediate technology leverage. Back in those days law firms were still doing many conveyancing related tasks manually, like writing to local councils to request searches, and paying for services by cheque. I remember wondering why lawyers back then were doing things manually and if there was a better way, as there were massive efficiencies to be gained if things were done differently. We decided to go all in on some very early tech (to obtain searches electronically) and, frightening as was back then to go down a different path from traditional firms, it paid off. Clients benefitted immediately. It felt like a real breakthrough.”

The conveyancing division in PD Law boasts about 10 full time staff, overseen by manager Bernie Gunders. Through her leadership, grace under pressure and unwavering work ethic, Bernie has ‘steered the ship’ for the last 10 years. “Some of the biggest differentials are our dedication to ongoing training, service iteration and client care. I’ve worked in different firms over the years, as have others within our team, and the constant theme is that we’re thorough. Although it’s a challenge to be committed to change, it’s why we find ourselves receiving this kind of recognition. It’s also very rewarding that we’ve got repeat clients who use us for buying and selling property throughout Queensland”.

Property easements are a common and important aspect of real estate ownership which are valuable to understand because of how they can impact a property’s use and value, and the rights and responsibilities of landowners.

An easement grants the right of use or access to a specific part of a property for someone who is not the owner. These rights are often granted to neighbours, utility companies or other government entities for various purposes. In this article, we’ll look in more detail at the different types of easements and how easements can protect a property owner, then outline important considerations before agreeing to an easement.

More on the definition of an easement

An easement is a legal right granted to a person or entity that allows them to use, access, or cross someone else’s property for a particular purpose. The lot, person or entity benefiting from the easement is referred to as the ‘dominant tenement’ or beneficiary while the property owner who grants the right is considered the ‘servient tenement’ that is ‘burdened’ by the easement. Easements are generally recorded in the property’s deed or title and are binding on all future owners of the property.

Different types of easements

There are several types of easements that serve various purposes. The most common types include:

Right of way: A right of way easement allows the beneficiary to use a path or driveway on someone else’s land to access their own property, which often occurs where the beneficiary’s property is landlocked or access is limited.

Easement of necessity: This type of easement is granted when a property owner needs access to a public road but lacks any other reasonable means of ingress and egress.

Easement by prescription: Also known as ‘prescriptive easements’, these are acquired through continuous, open, and unchallenged use of another person’s property for a specific period, which varies by jurisdiction.

Easement by express grant: An easement by express grant is voluntarily created and specifically granted by the property owner to another party through a written agreement or deed.

Easement by implication: This type of easement is created by law when it is implied that a property owner would have intended to grant an easement to another party based on the circumstances.

Easement by estoppel: Easements by estoppel occur when a property owner leads someone to believe that they have the right to use their property, and the person relies on this belief to their detriment.

Utility easements: These easements are granted to utility companies, such as power, water, or telecommunication providers, to access and maintain their infrastructure on a property.

Drainage easement: Allows the beneficiary to drain water from their property through another person’s land, common in areas of poor drainage or where the land is low-lying.

Conservation easement: This type of easement restricts the use of someone else’s land to protect its environmental, cultural, or historical values. Often employed by government departments, non-profit organisations and private landowners seeking to preserve natural habitats, heritage sites, or scenic areas.

How easements can protect a property owner

Easements can offer several obvious benefits to property owners, including:

•  They can be mutually beneficial to neighbouring properties, granting them a legal right to access their land through the servient estate and proactively preventing disputes and road maintenance costs.
•  In some cases, having an easement on a property can increase its value, especially if it grants access to desirable amenities or scenic views.
• Easements can prevent neighbouring property owners from building structures or planting trees that encroach on each other’s land.
• Utility easements ensure access to essential services, such as electricity, water, and sewage, without the need for each property to have separate utility lines.

Considerations before agreeing to an easement

Before granting or agreeing to an easement, property owners should carefully consider a range of factors, including:

Impact on property use: Determine how the easement will affect your property’s current and future use. Consider whether it will restrict your plans for expansion, development, or privacy.

Duration and scope: Understand the specific terms of the easement, including its duration, allowed activities, and any limitations imposed on both parties.

Professional advice: Consult with a legal professional with experience in property law, a conveyancer and/or a property surveyor to ensure you fully understand the legal implications and potential impacts of the proposed easement on your property.

Compensation: If the easement will significantly impact your property’s value or use, consider negotiating fair compensation with the party benefiting from the easement.

Right to modify or terminate: Determine whether the easement can be modified or terminated under certain conditions and what the process entails.

Existing easements: Investigate if there are any existing easements on your property that might affect future agreements.

Benefit from legal advice

As the points above illustrate, there is a lot to consider if your property involves an easement, either existing or proposed. Availing yourself of specialist advice from property lawyers such as our team at PD Law is highly advisable to help clarify the issues involved. While easements can provide shared access to utilities or amenities, they can also impose restrictions on your property’s use and development, so it’s essential to seek professional advice and fully understand the implications to protect your property rights and investments.

Easement FAQs

Q: How is an easement cancelled or removed?

A: By mutual agreement between the beneficiary and the servient owner, or if no agreement can be reached, potentially by a court to resolve the dispute.

Q: How long does an easement last?

A: Indefinitely provided the conditions and restrictions relating to the right are observed and absent of any legal challenge or termination.

Q. Are there formalities associated with easements?

A: Yes, an easement must be created for a specific purpose and be necessary or beneficial for the beneficiary’s land. The easement must also be created in writing and registered on the title of the servient land. The easement must not interfere with the normal use or enjoyment of the servient land by the servient owner or other parties.

Q: Do easements carry over from one owner of the property to the next?

A: Yes, easements usually carry over during property sale or transfer, providing the new owner with the same rights and obligations of the easement, as well as the conditions or restrictions that apply to it.

Q: Must an easement be disclosed in a contract of sale?

A: Yes, because of the fact an easement can affect the value and use of the property, and also places obligations and restrictions on the buyer. Both the seller and the buyer must disclose details of any easements that affect the property – including its type, purpose, restrictions and conditions – to avoid later legal disputes. Failure to disclose an easement can result in legal action, pecuniary penalties and potentially a void sale.

Q: What are the penalties if the conditions of an easement are breached or ignored?

A: Where the conditions or restrictions of the easement are breached, the aggrieved party may seek an injunction (stopping or ordering certain actions), damages or termination of the easement.

Vendor finance is a property purchase arrangement in which the seller – rather than a traditional financial institution such as a bank – provides financing to the buyer. This means the buyer pays the purchase price directly to the seller by making regular payments, typically with interest, to the seller over an agreed period.

Vendor finance has emerged as an attractive option for both buyers and sellers but it comes with specific considerations and risks. Those who do not otherwise qualify for a bank loan or finance from another institution may find the arrangement particularly attractive while for a seller, vendor finance can facilitate a quicker sale of their property – but there are pros and cons for both.

In this article, we will explore the essential components of a vendor finance agreement, the advantages and disadvantages from the perspectives of both buyers and sellers, and the potential risks involved in vendor finance transactions.

The essentials of a vendor finance agreement

A vendor finance agreement should be a legally binding contract that outlines the terms and conditions of the transaction. It typically includes the following key components:

Purchase price: The agreed-upon purchase price for the property.

Payment terms: The schedule and amount of payments the buyer will make to the seller, including any interest charged on the outstanding balance.

Interest rate: If applicable, the interest rate to be charged on the unpaid balance.
Duration of agreement: The length of time over which the buyer will make payments to the seller.

Title transfer: Details on when the property title will be transferred to the buyer (usually after the final payment).

Default provisions: The actions to be taken if either party fails to fulfil their obligations under the agreement.

Property condition: A statement of the property’s condition and any warranties or guarantees provided by the seller.

Rights and responsibilities: The rights and responsibilities of both the buyer and the seller during the term of the agreement.

Termination clause: Conditions under which either party can terminate the agreement.

Some of the pros and cons of vendor finance for buyers and sellers

Pros for buyers:

• Buyers with limited access to conventional financing can still purchase a property through vendor finance.
• Vendor finance deals can be quicker and involve less paperwork than the typical mortgage processes.
• Buyers may have more flexibility for negotiation on the terms of the agreement with the seller.

Cons for buyers:

• Vendor finance agreements may come with higher interest rates compared with bank loans.
• If the buyer defaults on payments, they could risk losing the property via repossession and any payments made.
• A buyer using vendor finance lacks the same level of consumer protection as a person with a typical bank loan, meaning they may not be able to dispute a charge, re-negotiate loan terms, or seek mediation or arbitration in the event of a dispute.

Pros for sellers:

• Offering vendor finance can attract a larger pool of potential buyers, including those unable to secure traditional financing.
• Sellers receive regular payments, which can provide a steady income stream.
• Vendor finance can help sellers sell their property more quickly, especially in a slow market.

Cons for sellers:

• If the buyer defaults, the seller may need to repossess the property and handle legal proceedings.
•  In the event of a buyer default, the seller may lose both the property and any payments received.
• Sellers may face limited access to funds until the full purchase price is paid. This may limit their ability to reinvest in other properties.

Summary of the risks involved in vendor finance arrangements

The most significant risk for both buyers and sellers in vendor finance is the potential for default. If the buyer fails to make payments, the seller may need to take legal action to regain possession of the property. Additionally, in a changing market, the property’s value may fluctuate during the agreement, affecting both parties’ interests.

Vendor finance agreements can be legally complex and require careful drafting to protect the rights and interests of both parties. A buyer should conduct thorough due diligence to ensure the property’s condition and title are clear, reducing the risk of unforeseen issues.

Consult experienced legal professionals before considering vendor finance

While vendor finance is a viable alternative for both buyers and sellers in conducting a real estate transaction outside of typical financing arrangements, it carries inherent risks through the possibility of default, fluctuating property values and legal complexities. Before engaging in vendor finance, both buyers and sellers should seek legal advice to make an informed decision on whether the financing arrangement is right for them.

At PD Law we regularly advise clients on the matters raised in this article about vendor finance and draft agreements to cover the transaction – call us today for an initial discussion if you plan to enter into such an arrangement.

Background

When cyclones are looming (an active system is being followed by the Bureau of Meteorology) some insurers have previously found the risk of insuring properties too great to accept during this time.

If insurers refuse cover, buyers may be inclined to terminate their contracts under the cooling off period until the weather system abates. The risk here, of course, is that the parties may be reluctant to commit again, or may have a change of heart, or may find an alternative property/offer more attractive. In short, the deal could be off because of a short term weather pattern.

“… the deal could be off because of a short term weather pattern…”

What The Contract Says

Clause 8.1 of the REIQ contract for both house and land sales and CTS lot sales provides that “the Property is at the Buyer’s risk from 5 PM on the first Business Day after the Contract Date.”

So, if for example, the garage attached to a house, or a part of the house is damaged as a result of cyclonic winds during the course of the contract, the buyer will still be required to complete the contract and pay the full purchase price notwithstanding the resultant damage. No set-off is allowed, and it is unlikely a seller would be prepared to make a claim on their own insurance and face higher premiums in years to come as a result.

There are limited exceptions, entitling a buyer to terminate where the dwelling is destroyed or damaged so that it is unfit for occupation as a dwelling, but of course, these exceptions are not something that parties can rely on it as no one knows what kind of damage will be occasioned prior to the cyclone’s arrival.

Solution

We recommend a simple condition, like the one below, be inserted into all contracts while active systems are present to alleviate any concerns the parties might have.

The benefits are numerous:

• Buyers ought not be concerned about their risk profile, given that most insurers will lift their embargo and insure once the system has passed;
• Sellers ought not be bothered as no prudent seller would cancel their insurance until after settlement passes anyway;
• Agents who have worked hard to conclude a deal can avoid it falling over

See the condition here:

Risk

Notwithstanding the Terms of Contract, the parties agree that the Property shall remain at the Seller’s risk until Settlement.

We were recently asked to advise on the nature of a contract based on an email exchange between a buyer’s agent and a seller’s agent. This issue has come up in earlier posts and will again no doubt as roles and methods of communication continue to evolve. Anyway now might be a timely reminder to reacquaint yourself with the risks of email exchanges in contract negotiation. Read on

When are your vendor clients, (and you) locked in by email?

Some sellers and buyers don’t want to be locked in until the proverbial ink dries on the contract. You’ve probably seen or even typed emails during negotiations with phrases like  subject to the parties signing a formal contract..., which have traditionally made it clear to other side that there’s no deal until the contract is signed.

A recent Supreme Court decision has shone a light on this practice, with some adverse consequences for a seller and its agent.

Bear with us, we’ll be brief:

• The seller engaged the agent to sell its commercial property and business. The agent found a buyer and started negotiating with the buyer’s representatives. The price was circa AUD$1.75m
• The parties each adopted words similar to those above (subject to the parties signing a formal contract) in email exchanges
• However they also used other phrases which ended up giving some mixed messages. Here’s a great example:

I look forward to receiving your clients confirmation that our offer is accepted as clearly both parties are now going to start incurring significant expenses.”

• The response to this was equally confusing:

“We accept the below offer which we understand will be subject to execution of the contract provided…”

• The seller found another buyer willing to pay more.

We suspect that, at about this time, all hell broke loose and people became concerned about their employment!

• The Court confirmed that a contract can exist even though:
  • the “subject to execution of the contract” correspondence was used;
  • negotiations were between buyers’ employees and seller’s agents;
  • some conditions were still yet to be agreed on; and
  • no contract was ever signed.

Lessons to be learned

The lessons to be learned are:

• be crystal clear in your choice of words when negotiating deals
• signatures and contracts are not always necessary to evidence an agreement.

As always, if in doubt about your turn of phrase, or that of the other side, just call us. Fallout can be minimised by some early, simple, clarifying correspondence.

Cheers, from the team at PD Law

So what is E-Conveyancing?

PD Law are excited to have Recently completed our first E-Conveyancing settlement using the new PEXA online platform.

So, what is E-Conveyancing and how is it different from the normal paper conveyancing process?

E-Conveyancing minimises the manual processes and paperwork associated with property settlement by enabling us to transact with other lawyers, conveyancers and financial institutions through the PEXA platform.

Anyone who has bought and sold property before will be familiar with the seemingly endless stream of paperwork involved in a single transaction, not to mention tracking down qualified witnesses to witness  signatures on legal documents and tedious trips to the post office.

A report published by Price Waterhouse Cooper states that 20% of settlements are delayed an average of seven days and  in 25% of these, customers suffered financially! E-Conveyancing reduces the risk of errors and delays giving our clients a greater certainty of a successful, on-time settlement by enabling us to sign and lodge documents on their behalf and complete financial settlement electronically.

By transacting through the PEXA platform sellers will receive the sale funds into their bank account within 20 minutes of settlement, whereas in the world of paper conveyancing these funds can take up to three days to be processed through the normal banking system.  Buyers received the advantage of receiving title to their property within the similar time frames to this rather than waiting weeks or sometimes even months to receive confirmation that the title has registered into their name.  E-conveyancing also eliminates the risk of delays by financial institutions in lodging the necessary documentation to transfer the title after settlement to the client, something that we see all too often which can have a significant financial impact on the buyer.

After an initial identification verification of the client, the remainder of the conveyance can be completed online,  without the need for the client to leave the comfort of their computer chair,  and  let’s face it most people would most likely have started this process by searching for real estate and solicitors online, so it makes sense to finish the process that way too.  “E-conveyancing offers a convenient, secure and streamline process, reducing the risk of delays and extra costs to the client”.

At PD Law we can discuss with you the benefits of completing your conveyancing using the PEXA E-conveyancing process, call Bernie on 1300 1PDLAW or book a phone consultation using our online booking system at www.pdlaw.com.au

Hard to get Foreign Buyers to buy? It just got 3% harder.

Starting 1 October 2016, foreign buyers will have to pay an additional 3% transfer duty (stamp duty) when buying residential land in Queensland. This surcharge is called Additional Foreign Acquirer Duty (AFAD). In order to keep this update brief we will not detail the definitions here. Suffice to say the legislation throws a fairly wide and heavy blanket over definitions of foreign buyers, foreign individuals, foreign corporations, AFAD Residential Land and Foreign Trusts to make sure that all categories of buyer will fall within the new laws.

Long Arm of the Law

It goes further to ensure that if an Australian entity (with Australian shareholders or trust interests ) is used to buy the land and that entity later becomes a foreign entity within 3 years (for example as a result of transfers of shares or trust interests), then the transaction will need to be re-assessed and more duty presumably paid. For example an internal share transfer from Australian Citizen  / entity to foreign entity / individual after settlement won’t avoid the additional duty payable.

Similarly, land which ultimately will be used as AFAD Residential Land will be subject to a five-year reassessment period.

Transitional Provisions

Contracts signed before 1 October 2016 will not be subject to AFAD, even where settlement occurs after that date. However, the same cannot be said about options. That is, if an option is entered into before 1 October, but exercised on or after 1 October, AFAD will apply.

“Nice Shouse!”

When Jed Clampettt buys next door….

Picture this

• 12 months ago – Seller lists his vacant block with you. Once he signs up he hands you the forest of pages of stuff he thinks is pertinent. You know most of it’s not, but you’re polite.
• 10 months ago – You finally get that block away. Settlement is smooth and the buyers invite you for a quick glass of bubbles, and show you their plans for the ‘dream home’. Blood drains from your face as you recall the early discussion with your seller when he handed you the ream of paper muttering something about stupid building guidelines.
• 3 months ago – the liveable shed (aka “shouse”) is finished (amazing it took that long really).
• One week after that – your seller receives a notice from the developer’s lawyer of its intention to claim $25,000 in liquidated damages as was agreed in the original contract. He emails it to you and his lawyer chasing ‘input please’.
• One day ago  –  your seller’s lawyer is on the phone, that really nice but tenacious one from PD Law. Says her client told you about the building covenants. She wants to have a quick word if that’s ok.
• Right now –  mouth dry, you’re dialling the seller’s mobile.

What are building covenants?

Design guidelines, architectural codes, building covenants. There are loads of names but they generally mean the same thing: the developer of a residential estate drew up some prescriptive rules about minimum building standards with the intent that all dwellings built in that estate meet a certain minimum standard. We’ll call them building covenants here.

When are they binding?

In the original contract between developer and a first buyer, the first buyer must comply with the building covenants because it’s a binding contract (as long as those conditions are themselves lawful!). However if the first buyer sells the block without having built on it to a second buyer (Jed), and doesn’t ensure in the contract that Jed’s bound by those building covenants, Jed’s good to go on the shouse, and so on down the line as the block is sold over and over. Once the contractual ‘chain’ is broken, subsequent owners are free to build what they like as long as they comply with relevant statutory building codes.

To provide themselves with a bit more coverage, developers make sure they’re indemnified by the first buyer for any loss suffered down the line because of the Jed effect. Sometimes developers add another stinger which states that an agreed cash payment represents the loss the developer faces for any breach down the line. Although these penalty amounts can themselves be a bit tricky to enforce, it’s better to avoid the issue in the first place.

Only consider this in the context of freehold vacant land. Things are a little different in a community title context, where other guidelines and covenants can in some circumstances be embedded within a community management statement.