Developers NB - Common Practice -v- the Law

Property developers who operate in Queensland would be familiar with the provisions of the Land Sales Act 1984.  Those provisions prevent the sale of lots yet to be created by a registered survey plan except in certain limited circumstances.  Many small scale subdivisions and commercial subdivisions are entered into on the basis of obtaining an exemption under section 19 of the Act.  The exemption is available in certain circumstances where the land is being subdivided into less than five allotments.

It has been common conveyancing practice to apply for the exemption to the Registrar at the Office of Fair Trading within 30 days after the contract is formed ie executed by both parties.  However, the Land Sales Act requires the application to be made within 30 days after the event which marks the entry by the purchaser upon the purchase. A recent decision of the Court of Appeal Division of the Supreme Court of Queensland has given guidance on this unusual expression contained in the Act to the effect that where a binding offer is submitted by a purchaser, the application to the Registrar for exemption needs to be made no more than 30 days after the binding offer is submitted, not 30 days after the offer has been accepted by the seller.

Application for exemption is relatively simple and the application fee is in the order of $35.00.  It is therefore prudent to apply for exemption as soon as possible.  Sellers will also need to ensure that they do not delay in accepting or rejecting offers submitted by purchasers as the delay may cause the contract to be void.

The decision will also impact upon large scale flat land subdivisions if an unsolicited offer is received from a purchaser before the purchaser has been provided with a disclosure statement.

For further information please contact Lynette Reynolds

T  (07) 3292 9735

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