The Property Law Act 2023 (Qld) comes into effect from 1 August 2025, replacing the Property Law Act 1974 (Qld).
So, what’s changing and what do you need to do?
What’s changing?
Seller disclosure
The change that has received the most publicity is the introduction of the ‘seller disclosure’ regime. You can read more about it in the following links.
LexisNexis Quick Reference Guide – Seller Disclosure Regime PLA 2023
LexisNexis Seller Disclosure Flowchart – PLA23
Fundamentally, what you need to know is that, if you are selling and your transaction falls within the regime:
1. you can’t just agree with the buyer that it doesn’t apply
2. you can’t shortcut the process
3. if you don’t complete the disclosure statement accurately (or fail to include prescribed documents) or don’t give it to the buyer before the contract is signed, the buyer may be able to terminate the contract at any time up to settlement.
There are some key exceptions to the seller disclosure regime, including sales between related parties, certain sales involving government bodies and sales where the price exceeds $10 million. Most exceptions do not apply automatically and must be opted into (via a formal waiver), so please seek advice before assuming you are part of an exception transaction.
It is worth noting that the seller disclosure regime can apply to options, but does not apply to off the plan sales contracts for land or body corporate units.
Leasing
The following guide provides a helpful summary of the changes that affect leasing law and practice.
LexisNexis Quick Reference Guide – Key Updates for Leasing PLA23
Additional information
The guide linked below provides a summary of some of the further changes made in relation to issues such as positive covenants, perpetuities and extensions of time for settlement (when there are adverse events like cyclones, public health orders or where the electronic platforms we all now use fail).
LexisNexis Quick Reference Guide – Additional Significant Changes PLA23
What practical changes are needed?
Seller disclosure
It is vital that agents and lawyers work together to prepare the disclosure and a contract that will operate within the new law. It is worth noting that some of the information required for disclosure will need searches undertaken and these may take up to a couple of weeks to obtain – depending on the Authority and where the property is located – so plan ahead.
Leasing
We do not see any wholesale changes being required to most leases.
The potentially concerning new requirement for the lessor not to unreasonably withhold consent to a change of use request applies only where the lease expressly refers to lessor’s consent being required. If the lease contains an absolute prohibition on using the premises other than for the permitted use, then the new provision will not apply.
Some leases may need changes to update legislation references and to exclude terms otherwise implied in leases by the PLA.
Tenant default
The biggest change to practice appears to be around defaults and the new Form 7 Notice to remedy breach.
1. Lessors will now need to serve notices to remedy breach not just on the tenant and guarantors, but also on all other ‘designated persons’.
The other designated persons are mortgagees who have a mortgage registered over the lease, subtenants and subtenants’ mortgagees who have a mortgage registered over the sublease, and (if the lease has been assigned and the tenant and guarantor have not been released) the previous tenant and its guarantors.
We do not consider that a third party with a PPSR security interest over the tenant’s property is a ‘designated person’.
2. The tenant, guarantor and all designated persons can now go to court and seek relief against forfeiture i.e. for the lease to be reinstated – and have a month to do so after the lease is forfeited.
That will potentially be a problem in circumstances where the lessor has another tenant lined up to go into the premises. Resolving the issue will involve identifying (quickly) who are the designated persons and asking them if they have any intention to try and step in and take over the tenancy. It would be advisable to include a condition in the new lease deal that provides an ‘out’ for the lessor if a designated person brings a claim for relief against forfeiture.
Importantly, there is no requirement to wait to hear from the designated persons before the Form 7 is actioned, and designated persons don’t have any rights to claim damages if it is. The designated persons rights are only to go to court and seek relief against forfeiture.
3. The Form 7 must now specify the period of time during which the breach must be remedied.
Currently, there is no requirement to specify, in either the Form 7 or the letter to the tenant, what the lessor considers a ‘reasonable period of time’ for compliance. Our reasoning is that it may help to deter what is in our view a common attitude among defaulting tenants (that they have the further compliance period specified to pay or comply before anything ‘real’ happens) and it leaves the timing of when to action the Form 7 entirely up to the lessor. That said, as a rule of thumb, the minimum period of time for compliance is:
(a) the next day after service of the Form 7 where the notice is for failure to trade
(b) a minimum period of 14 days for one month’s arrears, with an extra 7 days for each month of arrears after that, up to (say) 4 months arrears
(c) if the arrears are at 4 months or more (and reflecting the unlikelihood that the arrears can be cleared from trading/cashflow), a reasonable time for the tenant to refinance – we’ve generally taken that to be 6 weeks.
The new legislation still doesn’t tell us what a ‘reasonable period of time’ is.
On the basis that the compliance periods outlined above haven’t landed our clients in court or (when it has) the periods have been found to be reasonable, we propose to continue to adopt them.
Our recommendation remains that arrears are best managed swiftly and the longer lessors wait to serve a Form 7 notice, the more time they will need to expressly ‘allow’ for it to be remedied.
In a commonsense change, it is now no longer a requirement to go through the Form 7 process where the lessor has a reasonable belief that a tenant has given up possession and vacated permanently.
Release on assignment
Many leases (especially those governed by retail legislation) already provide for ‘release on assignment’, either expressly or under legislation. The new legislation recognises the arguably unfair situation of tenants and guarantors remaining ‘on the hook’ after they have ceased to be the tenant and after they have any control over who is.
In leases entered into on and from 1 August 2025, if a tenant assigns a lease to an assignee and the assignee later assigns the lease to a subsequent assignee, the tenant and its guarantors (if any) are released from liability to the lessor for any breach of the lease by the subsequent assignee.
Any documents that include provisions that state that the tenant and its guarantors are not released on assignment will need to be amended to specify that the clause applies ‘unless the law provides otherwise’ or ‘subject to relevant law’.
Options in leases
If a lease grants options to renew the term or purchase the land and the Act applies, there is potentially another step to go through before a lessor can deny the tenant the right to renew or purchase.
Importantly, the Act does not go as far as giving rights to tenants who simply miss the option exercise date. Tenants will still have to come up with arguments (as they do) that their late notice should be accepted.
If, however, the exercise of the option is conditional on a condition precedent, or the tenant performing the lease (e.g. not being in breach) and a lessor want to deny the option, the lessor must now serve a ‘breach notice’ specifying the breaches on the back of which the option rights are being denied and notifying the tenant of the right to go to court for relief against the refusal within a month of issue of the notice, as well as the wisdom of seeking independent legal advice on the issue.
There is a trap here, too. Lessors will lose the right to deny the option if they do not give the breach notice on time. The lessor has 10 business days from the tenant serving the option notice to give the breach notice (or, if the breach being relied on to deny the option occurs after the option notice is served, 10 business days from that breach occurring). So, the golden rule is to be alert to purported exercises of options and act quickly.
Next steps
We have prepared specific updates and tailored guidance for our clients on how the changes will impact their property and leasing arrangements going forward. If you would like assistance in understanding what the changes will mean for your business, please contact a member of our property team.
