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Sunset clause change bid concerns QLS

QLS Principal Policy Solicitor Wendy Devine and QLS Property and Development Law Committee Chair Matthew Raven.

Queensland Law Society has voiced its concerns about changes proposed under the Body Corporate and Community Management and Other Legislation Amendment Bill 2023.

The Bill to amend the Body Corporate and Community Management Act 1977 (Qld) was introduced to Parliament on 24 August and was referred to the Legal Affairs and Safety Committee.

At Parliament House on Thursday, the committee heard from Matthew Raven, QLS Property and Development Law Committee Chair, and Wendy Devine, Principal Policy Solicitor.

The proposed changes aim to:

  • allow for the termination of uneconomic community titles schemes (for example, unit blocks) for defined economic reasons with the agreement of 75 per cent of lot owners;
  • strengthen protection for “off-the-plan” home buyers from developers invoking sunset clauses in contracts for the sale of land;
  • permit bodies corporate to prohibit smoking in outdoor and communal areas;
  • prevent bodies corporate from blanket banning pets; and
  • clarify and enhance the ability for bodies corporate to tow vehicles from common property in a timely way.

QLS outlined the society’s concerns about four broad areas of the Bill: amendments related to the early release of buyer deposits, sunset clauses, the termination of community titles schemes and body corporate administration.

Ms Devine said proposed changes would not address the ambiguity in existing legislation, and buyers would continue to be at risk of losing deposits.

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“Some parties are relying on the ambiguity in the current legislation to argue that provided the buyer and seller expressly agree in their contract, the deposit holder may be directed to release the deposit to the seller,” she said.

“The Bill simply adds a statutory note to the section saying the parties cannot contract out of the provision.  This is an unacceptable outcome when there are clear examples of this provision being abused and a simple legislative change could clarify the obligations of those holding deposits in trust accounts.”

Ms Devine said the proposed sunset clause amendments modify the circumstances in which a seller could rely on a sunset clause to terminate a contract, changing the existing allocation of risk between the buyer and seller.

“The Bill appears to modify the seller’s usual position so that a seller can now request the Supreme Court’s approval to terminate a contract under a sunset date because seller’s business is not viable,” she said.

“We are also concerned this will encourage the practice of developers demanding additional payments in order to proceed with contracts under the threat of making an application to court for termination under the sunset clause.”

QLS reiterated that although it broadly supported the reforms to body corporate laws, it held significant concerns about the processes for terminating a community titles scheme.

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The committee is due to table its report by 6 October 2023.

Read the QLS submission here.

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