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 on 1 August 2025.

Review of the PLA 1974 by the Commercial and Property Law Research Centre at the Queensland University of Technology (QUT) 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 “Property Law Review – Final Report 2018: Property Law Act 1974 (Qld)” (“Report”)[1] were incorporated into what would ultimately become the PLA 2023.

This three-part article series provides a brief overview, examination and discussion of some of the key changes its provisions bring to property law practice in Queensland and what these potentially mean for practitioners and their clients.

Changes affecting leases including assignment

Assignment of reversion

Where a lessor transfers the reversion of a lease to a transferee, each right conferred on the lessor under the lease runs with the reversion and may be exercised by the transferee and conversely, each obligation imposed on the lessor also runs with the reversion and may be enforced by the lessee against the transferee.[2] The lessor remains liable for a breach of a term of the lease committed by the lessor prior to the transfer of the reversion of the lease.[3]

Consent to assignment, sublease, change of use or alterations

Consistent with the PLA 1974, section 142 of the PLA 2023 states that a lessee may request the lessor consent to an assignment of the lease or dealing with the leased premises and the lessor must not unreasonably withhold consent. The lessee must provide the lessor with any information required under the lease.[4] The lessor must give the lessee a decision notice within one month after receiving full particulars of the lessee’s proposal,[5] though the time period may be extended by mutual agreement of the parties.[6]

If the lessee believes the lessor has unreasonably withheld consent or believes a condition attached to the lessor’s consent is unreasonable, unnecessary or onerous, or the lessor fails to give a decision notice, the lessee may apply to the court for a decision on the appropriate orders to be made.[7]

Enforceability of covenants

Section 143 provides that an assignee is bound by the terms of the lease whether or not the term touches and concerns the land or is express, implied or imposed by law upon assignment of the lease by a lessee.[8] This will not apply where the lease expressly provides the term is personal or excludes the operation of the provision, or the lessee and assignee expressly agree that the benefit of the term remains with the lessee and it accrued to the lessee before assignment or the lessor consents to the benefit remaining with the lessee.[9]

Release of lessee and guarantor following lease assignment to subsequent assignee

Section 144 of the PLA 2023 stipulates that if an assignee of a lease then further assigns the lease to a subsequent assignee, the lessee and any guarantor of the lessee are released from liability to the lessor for any breach of the lease by the subsequent assignee despite any contrary agreement.[10] This is a change to the common law position which held that a lessee could remain liable for a subsequent lessee’s breach despite having no part in that subsequent assignment.

Changes affecting easements

There is currently uncertainty at common law and the PLA 1974 regarding whether positive covenants transfer to new owners of land. Section 65 of the PLA 2023 remedies this by providing that, prima facie, positive and negative covenants bind the grantor and grantee of the easement and their successors in title.[11] This will not apply where the covenant is expressed to be personal to the grantor or grantee of the easement.[12] The provision now provides certainty to the law regarding both positive and negative covenants.

The PLA 2023 expands the powers of the court as they relate to the modification or extinguishment of easements or other restrictive covenants. In particular, the court may modify an easement by including additional terms such as those concerning the use, repair or maintenance of the burdened land.[13] The court may also modify or extinguish a building management statement where the existing lot owners’ consent cannot be obtained and it is just, equitable and reasonably necessary in the circumstances to do so.[14]

Other significant amendments

Instalment contracts

In order to avoid the inadvertent creation of instalment contracts under the PLA 1974 and the common law, section 89 of the PLA 2023 defines an “instalment contract” as a contract for the sale of land by which the buyer is to make one or more payments by instalment of the purchase price, other than a deposit, and is not entitled to receive a transfer of title in exchange for the payments. Furthermore, an “instalment” does not include an option fee, rent and outgoings, rates and taxes, interest on the purchase price, fee for maintenance of the land, or a fee for an extension of time to complete the contract.[15]

Unlike under the PLA 1974, which operated to automatically create instalment contracts, section 90 of the PLA 2023 requires the buyer to give the seller notice electing to perform the contract as an instalment contract before it constitutes an instalment contract.

Deeds

The amendments introduced into the PLA 1974 by the Justice and Other Legislation Amendment Act 2021 (Qld) as a response to the COVID-19 pandemic have been made permanent including that a deed may be in the form of an electronic document and may be electronically signed.[16]

The rule in Pigot’s Case has been abolished and consequently, a deed is not invalidated or rendered voidable or otherwise affected merely because of a material alteration made by the obligee after it is executed.[17]

Conclusion

The PLA 2023 is undoubtedly a significant modernisation of its predecessor and intends to create certainty in circumstances where previously there was ambiguity or no legislative guidance. The wording of its provisions is simpler and the changes in technology and legal practice have been taken into account. The PLA 2023 is due to commence on 1 August 2025. The amendments to property law in Queensland will likely be warmly welcomed by practitioners and the community alike.

Footnotes 

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

[2] Property Law Act 2023 (Qld) ss 140(1) – 140(3).

[3] Property Law Act 2023 (Qld) s 140(7).

[4] Property Law Act 2023 (Qld) s 142(2).

[5] Property Law Act 2023 (Qld) s 142(5).

[6] Property Law Act 2023 (Qld) s 142(7).

[7] Property Law Act 2023 (Qld) ss 142(8), 142(9).

[8] Property Law Act 2023 (Qld) ss 143(1), 143(2).

[9] Property Law Act 2023 (Qld) ss 143(3), 143(4).

[10] Property Law Act 2023 (Qld) s 144.

[11] Property Law Act 2023 (Qld) s 65(2).

[12] Property Law Act 2023 (Qld) s 65(4).

[13] Property Law Act 2023 (Qld) s 181(6)(b).

[14] Property Law Act 2023 (Qld) s 181(3)(c).

[15] Property Law Act 2023 (Qld) s 87.

[16] Property Law Act 2023 (Qld) s 50.

[17] Property Law Act 2023 (Qld) s 60.

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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