Subdividing and selling land
The Queensland Government has passed laws changing sunset clause rules to strengthen protections when signing off-the-plan contracts for the sale of land (not including community title schemes such as apartments).
From 22 November 2023 off-the-plan land sale contracts can only be terminated using a sunset clause by sellers:
- with the written consent of the buyer
- under an order of the Supreme Court, or
- in another situation prescribed by regulation.
These reforms follow consultation with consumers, property developers and peak bodies completed in 2022 and 2023. The government intends to review the reforms in 1 to 2 years. The review will consider whether further reforms are required to protect people buying proposed community titles and similar lots off the plan.
Read more about sunset clauses on this page.
There are rules for subdividing and selling land and selling land off the plan.
Maintaining an open dialogue with the buyer can help avoid unnecessary issues during the purchasing process. This includes committing to ongoing and reasonable negotiation throughout the contract, particularly when property values change or difficulties arise, such as skilled tradespeople shortages.
Note: If you're a small-scale developer (5 subdivisions or fewer), some of these rules won't apply.
Information you must disclose
Before you enter into a contract for a proposed lot you must give the buyer a signed disclosure statement and a disclosure plan. These documents will set out the proposed details of the lot.
A registered cadastral surveyor will need to prepare these documents. The Surveyors Board Queensland can help you learn more or find a registered surveyor.
Disclosure statement
The disclosure statement will record:
- that you have given the buyer a disclosure plan
- whether you have applied for—or been granted—development approval
- that settlement must be within 18 months of the day you sign the contract
- that you must give the buyer a copy of the registered survey plan.
Disclosure plan
You need to clearly identify the proposed lot to the buyer in the disclosure plan.
The disclosure plan includes information about the lot's:
- dimensions and area
- planned earthworks during the development
- proposed orientation (by referring to north).
For example, for subdivided land you must disclose the lot's number, total area and proposed orientation (by referring to north).
If a disclosure is incorrect due to an error or a change in the plans, you'll need to issue a statement to change the original disclosure plan and give it to the buyer as soon as possible after the proposed lot is registered.
Interests and benefits
You must disclose to a potential buyer if you have (or anyone else associated with the sale has) interest in, or may benefit from, the sale. You must make this disclosure if you have at least a 15% interest in the property or pay any benefits (such as fees or commissions) to a third party.
You must do this even if you're a small-scale developer.
Complete the Disclosure to potential buyer form and give it to a potential buyer.
Find out more about disclosing interests and benefits.
Deposit monies into a trust account
The buyer must pay any money towards buying (or paying off) the proposed lot directly into a trust account.
The trust account must be administered by:
- a real estate agent
- a law practice
- the Public Trustee.
Your contract must set out a specific entity (in any of the above categories) to administer the trust monies. It is an offence to breach this requirement. The maximum penalty is $32,260 or 1 year imprisonment.
Your trust account administrator will need to follow the laws that cover how to deal with trust monies.
Find out about the trust account rules for real estate agents and law practices.
Law changes made on 22 November 2023 confirm sellers can't get early access to deposits. Deposits paid under off-the-plan contracts can only be released from a trust account to you (as a property seller) at the time of settlement or if the contract otherwise finalises and you are entitled to the deposit.
These changes are as a result of amendments to the:
- Land Sales Act 1984
- Body Corporate and Community Management Act 1997
- Building Units and Group Titles Act 1980
- South Bank Corporation Act 1989.
Terminating a contract
A buyer has a right to terminate the contract if:
- they find out about a change to the initial disclosure about the state of the land, and
- the change will cause a significant disadvantage to them (known as 'material prejudice').
You must notify the buyer of a change to any detail that was set out in the disclosure material.
The buyer must show that the change will be a significant disadvantage to them (such as a significantly reduced size).
They can terminate due to material prejudice (whichever is sooner):
- within 30 days of receiving the developer or seller's notification
- before the title of ownership transfers to them.
The courts have set a precedent to decide if a disadvantage is material prejudice.
Sunset clauses in off-the-plan contracts for the sale of land
Changes to the Land Sales Act made on 22 November 2023 mean sellers (including property developers) are now subject to tougher laws around the use of sunset clauses to terminate off-the-plan contracts for the sale of land.
As a seller, you can only use a sunset clause to terminate an off-the-plan contract for the sale of land in the following situations:
- with the written consent of the buyer
- under an order of the Supreme Court, or
- in another situation prescribed by regulation.
These reforms apply to:
- existing off-the-plan contracts for the sale of land that were signed but not settled by 22 November 2023, and
- new off-the-plan contracts for the sale of land signed on or after 22 November 2023.