The Property Law Act 2023 (Qld) is set to bring about significant changes to property law in Queensland. This three-part article series entitled “Upcoming Changes Under the Property Law Act 2023 (Qld)” provides a brief overview of the origins, objectives and enactment of the new statute before examining and discussing some of the key changes its provisions bring to property law practice in Queensland and what these potentially mean for practitioners and their clients. In particular, Part 1 focuses on changes to seller disclosure requirements for all sales of land. Part 2 examines changes to extensions of time for settlement in certain cases, and some of the important changes affecting mortgages. Part 3 concludes by identifying and discussing changes affecting leases, easements, deeds and instalment contracts.

Introduction

The Property Law Bill 2023 (“Bill”) is the most significant change to property law in Queensland since the Property Law Act 1974 (Qld) (“PLA 1974”) which came into force in December 1975. The Bill received Royal Assent on 2 November 2023 as the Property Law Act 2023 (Qld) (“PLA 2023”) and will commence upon proclamation, which is expected to be sometime around mid to late 2024.

Review of the PLA 1974 was instigated by the then-Attorney General, Jarrod Bleijie, who in August 2013, instructed the Commercial and Property Law Research Centre at the Queensland University of Technology (QUT) to modernise and simplify its provisions with reference to related legislation, case law and the realities of practice.[1] The result was the “Property Law Review – Final Report 2018: Property Law Act 1974 (Qld)” (“Report”).[2]

The Report identified a number of areas of the PLA 1974 that warranted reform including recommending the insertion of new provisions and repealing others which had become obsolete or redundant such as those that pertain to old system land and conveyancing. Many of the recommendations contained in the Report were incorporated into what would ultimately become the PLA 2023.

Changes to Extension of Time for Settlement in Certain Cases

The PLA 2023 also contains new provisions permitting extensions of time for settlement in recognition of the reality of unforeseeable external factors interfering with the need for settlement to occur with time being of the essence. These external factors include when the day of settlement is not a business day, where computers of the land registry, Commissioner of State Revenue, electronic lodgment network (ELN) or a financial institution are inoperative, or an adverse event occurs.

Contract calls for settlement on non-business day

If the contract provides for settlement to take place on non-business day, section 78 of the PLA 2023 states that despite the term of the contract, settlement will be on a day as agreed by the parties or otherwise, the next business day.

Inoperative computers at land registry and other entities

The PLA 2023 takes into account the possibility of technical issues such as essential computer systems becoming inoperable at the time of settlement. Where the buyer cannot verify the seller’s title because of computer issues at the land registry, time stop being of the essence and the seller is not taken to be in breach of contract.[3] Either party may give notice to the other stating that the computers are once again fully operational and settlement is to occur between three to seven business days from the date of the notice.[4] Such notice will render time of the essence upon receipt by the other party.[5]

There is also now a provision for e-conveyancing contracts where, on the day of settlement, the contract cannot be settled because of computer issues of relevant entities including the land registry, Commissioner of State Revenue, ELN or a financial institution or because the entities are closed for business.[6] In such circumstances, the parties are taken not to be in breach of the contract but time remains of the essence and settlement is to be the next business day subject to any agreement by the parties to the contrary.[7]

Extension due to adverse event

Section 81 of the PLA 2023 provides that where a party is unable to complete settlement because of an adverse event time stops being of the essence, that party must take reasonable steps to mitigate the effects of the adverse event, and that party is not in breach of the contract for failing to complete settlement.[8]

An adverse event is one which causes serious disruption to a community and examples include natural disasters, the requirement to comply with a lawful direction or order by a government entity, war, terrorism, civil disturbance or riot, and explosions or sudden impact.[9]

The parties may agree to a new date and time for settlement, or otherwise, the non-attending party must inform the other party of the adverse event and its effect on the failure to complete settlement.[10]

The non-attending party must also give notice to the other party that it can complete the contract as soon as practicable after the adverse event no longer prevents it from occurring.[11] The notice must include a time for settlement of the contract and state a date between five and ten business days from the date of the notice.[12] Upon the other party’s receipt of the notice, time is once again of the essence.[13]

Changes Affecting Mortgages

Protection of the buyer

Section 87 of the PLA 1974 protected a buyer who purchases a property from a mortgagee exercising a power of sale. Sub-section 117(2) of the PLA 2023 provides that a buyer is not answerable for loss, misapplication or non-application of the purchase money paid for the property and need not enquire as to whether such steps were taken. The definition of “mortgagee” has been expanded to include a receiver.[14]

Application of insurance money

Where money is received under an insurance of mortgaged property the mortgagee may require it be applied towards reinstatement of that property but only if the mortgagee insured the property and the mortgage expressly states it may be so applied.[15] The mortgagor may require insurance money to be applied in such manner if the mortgage expressly states the money may be so applied or the mortgagor insured the property for the reinstatement value of the property to comply with a requirement under the mortgage or with the consent of the mortgagee.[16] The right of the mortgagor overrides that of the mortgagee and the provisions apply irrespective of any agreement contrary by the parties.[17]

Appointment of receiver

The PLA 2023 also provides additional criteria for the appointment of a receiver. A receiver may only be appointed in the appropriate form if the mortgagee is entitled to take or enter into possession of the property.[18] The receiver should be an appropriately qualified person and is the agent of the mortgagor.[19]

Relief against payment of accelerated sum

If a mortgagor defaults under the mortgage and pays the amount or interest and any reasonable expenses incurred by the mortgagee because of the default before the mortgagee exercises a power of sale or commences proceedings, the mortgagor may apply to the court for a relief against payment of any accelerated sum in a proceeding brought by the mortgagee to enforce its rights.[20] The court may grant such relief if it considers the order is appropriate in the circumstances and must take into account the conduct of the parties and any other relevant matters.[21]

Absent or unknown mortgagee

The PLA 2023 expands upon a provision that provides a mechanism for a person entitled to redeem land where the mortgagee is out of the jurisdiction, is unknown or cannot be found, is deceased with no personal representative administering the estate, or is uncertain in identity.[22] Upon application by such person, the court may order the debt secured by the mortgage to be dealt with in a manner which the court considers appropriate and any outstanding debt under the mortgage be paid into court.[23]

Furthermore, if it is subsequently shown that the mortgage debt was more than what was deemed payable by the court, the remaining amount due and owing will continue to be a debt due under the mortgage.[24]

Click here to read “Upcoming Changes Under the Property Law Act 2023 (Qld) - Part 3: Leases, Easements, Deeds and Instalment Contracts”.

Footnotes 

[1] Property Law Review – Final Report 2018: Property Law Act 1974 (Qld) (QUT), 52.

[2] Property Law Review – Final Report 2018: Property Law Act 1974 (Qld) (QUT).

[3] Property Law Act 2023 (Qld) ss 79(1) – 79(3).

[4] Property Law Act 2023 (Qld) ss 79(4), 79(5).

[5] Property Law Act 2023 (Qld) s 79(7).

[6] Property Law Act 2023 (Qld) s 80.

[7] Property Law Act 2023 (Qld) ss 80(2) – 80(6).

[8] Property Law Act 2023 (Qld) ss 81(1) – 80(3).

[9] Property Law Act 2023 (Qld) s 81(9).

[10] Property Law Act 2023 (Qld) ss 81(4) and 81(5)(a).

[11] Property Law Act 2023 (Qld) s 81(5)(b).

[12] Property Law Act 2023 (Qld) s 81(6).

[13] Property Law Act 2023 (Qld) s 81(7).

[14] Property Law Act 2023 (Qld) s 117(4).

[15] Property Law Act 2023 (Qld) ss 122(1), 122(2), 122(4).

[16] Property Law Act 2023 (Qld) s 122(3).

[17] Property Law Act 2023 (Qld) ss 122(5), 122(6).

[18] Property Law Act 2023 (Qld) ss 123(1), 123(3).

[19] Property Law Act 2023 (Qld) ss 123(2), 123(4).

[20] Property Law Act 2023 (Qld) ss 130(1) – 130(3).

[21] Property Law Act 2023 (Qld) ss 130(4) – 130(5).

[22] Property Law Act 2023 (Qld) s 136(1).

[23] Property Law Act 2023 (Qld) s 136(2).

[24] Property Law Act 2023 (Qld) s 136(5).

References & Further Reading

A.     Legislation

Property Law Act 1974 (Qld).

Property Law Act 2023 (Qld).

B.    Other

Property Law Bill 2023.

Property Law Bill 2023 – Explanatory Notes.

Property Law Regulation 2023 (Qld).

“Property Law Review – Final Report 2018: Property Law Act 1974 (Qld)”, (Queensland University of Technology).

Record of Proceedings, Qld Parliament, First Session of the 57th Parliament, Hansard.

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