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Housing and Other Acts Amendment Bill 2005
HOUSING AND OTHER ACTS
AMENDMENT BILL 2005
EXPLANATORY NOTES
SHORT TITLE
Housing and Other Acts Amendment Act 2005
GENERAL OUTLINE
Objectives of the Bill
The objective of the Bill is to amend the Housing Act 2003 concerning: the
transition from the State Housing Act 1945 and regulation of organisations
funded by the Department of Housing to provide housing services; to
repeal the Commonwealth State Housing Agreement (Service Personnel)
Act 1991; and to amend the Building and Construction Industry Payments
Act 2004 to correct an error in Schedule 1.
Reasons for the objectives and how they will be achieved
The Housing Act 2003 (the Housing Act) commenced on 1 January 2004,
repealing the State Housing Act 1945 (the 1945 Act) and dissolving the
Queensland Housing Commission. The Housing Act continues to
recognise the State Government's role in traditional forms of housing
assistance and enables the Department of Housing to undertake new
activities to achieve affordable housing objectives and regulate
organisations funded to provide housing services.
Several issues have emerged since the development of the Housing Act.
The proposed amendments to the Housing Act which are required to
address these issues seek to improve the:
· regulation of organisations funded by the Department of Housing
to provide housing services; and
· transition from the 1945 Act to the Housing Act.
Consequently, the amendments to the Housing Act will improve the
Department of Housing's capacity to:
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Housing and Other Acts Amendment Bill 2005
· improve housing outcomes for its clients and those of funded
service providers, by empowering the chief executive to appoint
an interim manager to funded housing services operated by local
governments and Indigenous community councils in certain
limited circumstances; and
· streamline administrative arrangements, by:
empowering the chief executive to:
--
· set multiple fixed and variable interest rates for owner-
occupier home loans established under the Housing
Act; and
· approve the sale of a house or land, subject to
agreements under section 113, for a price less than the
total capital cost;
removing the obsolete reference to section 29Q of the 1945
--
Act in section 141 of the Housing Act, which concerns the
cost of terminating housing trusts;
amending section 113 of the Housing Act to replace the
--
Governor in Council with the chief executive as the
decision-maker in respect of interest rates for shared equity
and contracts of sale products;
deleting sections 113(4) and 113(4A) of the Housing Act,
--
which provide for the cost of alterations, improvements or
enlargements made by the Department of Housing to a
property that is the subject of a shared equity contract or
contract of sale, to be added to the unpaid purchase money
without the agreement of the purchaser. This provision is
inconsistent with the Consumer Credit Code;
amending section 95 of the Housing Act to ensure that
--
purchasers under shared equity contracts and contracts of
sale are not exempt from paying local government rates and
providing for the validation of rates levied for land of which
the owner was for the whole or the part of the period from 1
January 2004 a purchaser of land under the Housing Act;
validating concessions provided for conversions of
--
perpetual leases to freehold made from 1 January 2004,
when the Housing Act commenced, and restoring the power
to provide such concessions; and
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Housing and Other Acts Amendment Bill 2005
applying the penalty provision in section 81(5) to an
--
existing requirement under section 81(3) which states that a
person must certify a document under their possession or
control as a true copy, unless they have a reasonable excuse.
The Bill repeals the Commonwealth State Housing Agreement (Service
Personnel) Act 1991 which governed the handover arrangements of
defence housing from the State to the Commonwealth Defence Housing
Authority. These arrangements were finalised in 1993-94, consequently
the Act is no longer required.
The Building and Construction Industry Payments Act 2004 was assented
to on 20 May 2004. The Act made amendments to the Queensland
Building Services Authority Act 1991, including the insertion of a new
provision, section 67 AAA.
The Bill makes amendments to the drafting of section 67AAA to ensure the
provision achieves its intended objective of clarifying what constitutes a
building contract for the purposes of Part 4A of the Queensland Building
Services Authority Act 1991.
Administrative cost to Government of implementation
It is anticipated that the Bill will not impose an administrative cost to
Government. Implementation of the new Bill will be supported by the
resources of the Department of Housing and by the Queensland Building
Services Authority with respect to the amendment to the Building and
Construction Industry Payments Act 2004 (the BCIP Act).
Consistency with Fundamental Legislative Principles
While the provisions of the Bill are generally consistent with the standards
required to be met under the Legislative Standards Act 1992, issues
concerning conformity with fundamental legislative principles may be
raised in relation to the following provisions.
Section 95 exemption from rating
Under the Housing Act, land held or administered for the purposes of the
Housing Act is not rateable land for the Local Government Act 1993. The
only exception to this provision is land which is the subject of or purchased
under a "section 24 contract", namely land which is the subject of shared
equity or instalment contract arrangement established under the repealed
1945 Act. Under these contracts, the land remains in the name of the State
during the period of the contract.
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Housing and Other Acts Amendment Bill 2005
There is no provision that deems land the subject of new or re-negotiated
shared equity or instalment contracts entered into since 1 January 2004 to
be rateable under the Local Government Act 1993. Therefore, local
governments can not recover rates directly from these home buyers or
exercise the power of sale in the event of default.
The Bill:
· ensures that all properties the subject of shared equity or
instalment contracts entered into under the Housing Act since 1
January 2004, are rateable land under the Local Government Act
1993;
· re-establishes the legislative basis for local governments to
recover rates and/or exercise the power of sale, in the event of
default by those who have entered shared equity or instalment
contracts under the Housing Act; and
· also amends the Local Government Act 1993 to ensure that the:
· priority of the State is preserved with respect to the proceeds
of sale where a local government exercises the power of sale
in the event of default; and
· meaning of "owner" of land applies to all purchasers who
have entered into shared equity or instalment contracts
either before or after the commencement of the Housing
Act, on 1 January 2004.
As a result, it could be argued that the Bill does not have sufficient regard
to the rights and liberties of individuals as it imposes obligations
retrospectively including the validation of rates levied for land the subject
of shared equity or instalment contracts, of which the owner was for the
whole or the part of the period from 1 January 2004 a purchaser of land
under the Housing Act.
This provision can be justified as it will restore the requirement; which has
been absent for share equity or instalment contracts entered into since 1
January 2004; that all land subject to these contracts will be rateable land
under the Local Government Act 1993, irrespective of when the contracts
were entered into. Consequently, all purchasers under these contracts will
be treated in a consistent manner and no one will be disadvantaged.
The Fundamental Legislative Principles are not infringed as a result of the
retrospective nature of the Local Government Act 1993 amendment which
preserves the priority of the State with respect to the proceeds of sale, as it
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Housing and Other Acts Amendment Bill 2005
applies only to the Department of Housing and has no impact on
individuals.
Concessions to the conversion of perpetual leases to freehold
Holders of perpetual leases can apply to convert their leasehold interest to
freehold, upon payment of the freehold value of the land. Under the State
Housing (Freeholding of Land) Act 1957, lessees were entitled to receive a
concession on the freehold price based on rental payments by the lessee. In
the consequential amendments made by the Housing Act to the State
Housing (Freeholding of Land) Act 1957, the chief executive power to
provide these concessions was inadvertently removed.
The Bill will empower the chief executive to offer concessions to reduce
the cost of freeholding to holders of residential perpetual leases, on
conversion of their interest to freehold and provide the legislative basis for
any concessions provided for conversions to freehold undertaken from 1
January 2004, when the Housing Act commenced.
The retrospective nature of the amendment can be justified as it clearly
provides benefits to clients and will not impact negatively on the rights and
liberties of individuals.
CONSULTATION
Community
In May 2003, the Department of Housing circulated, to all local
governments and Indigenous community councils in Queensland, a
consultation paper on the proposed expansion of the interim manager
provision to include local governments and Indigenous community
councils. The paper described the proposed amendment of the Housing
Act in relation to the interim manager and the context in which this power
is likely to be used. The paper provided a rationale for extending the power
to cover local governments and Indigenous community councils. The
Department of Housing also consulted with the Local Government
Association of Queensland.
The draft Bill and explanatory notes were forwarded to funded service
providers, local governments, Indigenous community councils and peak
housing organisations in January 2005.
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Housing and Other Acts Amendment Bill 2005
Industry
The Queensland Building Services Board has been consulted about the
proposed amendment to the BCIP Act. The Board comprises
representatives from licensed builders, licensed trade contractors
(Specialist Trades Alliance), building and construction unions (the
Construction Forestry, Mining and Energy Union), the accounting
profession and a non-voting Government member (Department of Public
Works).
Government
The draft Bill and explanatory notes were forwarded to the Department of
the Premier and Cabinet, Queensland Treasury, the Department of Local
Government, Planning, Sport and Recreation, the Department of
Communities, the Department of Employment and Training, the
Department of State Development and Innovation, the Department of
Justice and Attorney-General, Queensland Health, the Department of
Public Works, the Department of Aboriginal and Torres Strait Islander
Policy, Department of Tourism, Fair Trading and Wine Industry
Development and Disability Services Queensland in January 2005.
The Commonwealth Department of Family and Community Services has
been consulted on the repeal of the Commonwealth State Housing
Agreement (Service Personnel) Act 1991.
NOTES ON PROVISIONS
PART 1 - PRELIMINARY
Short title
Clause 1 sets out the short title as the Housing and Other Acts Amendment
Act 2005.
Commencement
Clause 2 provides that:
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Housing and Other Acts Amendment Bill 2005
(1) sections 7 and 11 are taken to have commenced on 31 December
2003; and
(2) Section 8(4) and part 4, other than section 18, are taken to have
commenced on 1 January 2004.
PART 2 AMENDMENT OF HOUSING ACT 2003
Act amended in pt 2
Clause 3 provides for an amendment to the Housing Act 2003.
Omission of s38 (Application of pt 5)
Clause 4 omits section 38. Section 38 of the Housing Act 2003 presently
excludes the appointment of an interim manager over the funded service of
a local government, Aboriginal Council, Island Council or the Island
Coordinating Council. Consequently, Part 5 will apply to all registered
providers, including a local government, Aboriginal Council, Island
Council and the Island Coordinating Council and as a result will enable the
Department of Housing to intervene by appointing an interim manager
where significant risks to tenants and/or assets have been identified.
Amendment of s81 (Power to require information or
documents)
Both section 81(1) and (3) enable the chief executive or authorised officer
to make a requirement of a person to provide either orally or in writing,
information or copies of documentation that the chief executive or
authorised officer may require. However, section 81(5) only makes it an
offence to fail to comply with the requirements in section 81(1).
Clause 5 of the Bill will extend the penalty provisions in section 81(5) to
section 81(3). Therefore, a maximum penalty of 20 units (currently $1500)
may apply where a person who has possession or control of the document
fails to certify the copy as a true copy of the document or entry.
Amendment of s92 (Standard interest rates)
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Housing and Other Acts Amendment Bill 2005
Clause 6 omits section 92(2) and replaces it with a provision which
empowers the chief executive to offer one or more standard fixed or
variable interest rates for all owner-occupied home loans, including shared
equity contracts and contracts of sale entered under the Housing Act 2003.
Amendment of s95 (Exemption from rating)
Clause 7 subclause (1) provides that the exemption from rating of portfolio
land does not apply to any shared equity or instalment contacts entered into
on or after 1 January 2004 under the Housing Act 2003. Consequently, all
land subject to these contracts will be rateable land under the Local
Government Act 1993, irrespective of when the contracts were entered into.
Clause 7 subclause (2) defines a "section 113 contract" as a contract of
sale, entered into under section 113, of the Housing Act 2003 where the
purchasing price, other than any deposit, is payable in two or more
instalments, or the sale is of a share in a house and land.
Amendment of s113 (Chief executive's power to sell houses to
eligible persons)
Clause 8 subclause (1) updates the references in section 113(3A) to
"subsection (3B) and (3D)", consequent to the removal of section 113(3C).
Clause 8 subclause (2) deletes section 113(3C) and thereby empowers the
chief executive to approve the sale of properties the subject of agreements
under section 113, at a capital loss. This is consistent with the general
powers provided to the chief executive under the Housing Act 2003.
Clause 8 subclause (2) also deletes section 113(4) and (4A), removing the
power of the chief executive to:
(i) add to the unpaid purchase price the capital cost of an alteration,
improvement or enlargement made by the State acting through the
Department of Housing to a property the subject of a shared equity
contract or a contract of sale agreement; and
(ii) endorse the amendments to the contract accordingly.
As a result, the Department of Housing can not unilaterally increase the
unpaid purchase price of a home which is the subject of a contract of sale
for which alterations, improvements or enlargements to the dwelling have
been made without the agreement of the purchaser.
Clause 8 subclause (3) updates the references in section 113(3D) to
"subsection (3A) and (3B)", consequent to the removal of section 113(3C).
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Housing and Other Acts Amendment Bill 2005
Clause 8 subclause (4) replaces the reference to the Governor-in-Council in
section 113(E) with the chief executive. This provides for consistency in
giving the power to the chief executive to set interest rates for home
ownership products under section 113 of the Housing Act 2003
Clause 8 subclause (5) omits the heading "Improvements etc. after contract
of sale entered into" as section 113(4) and (4A), to which it refers, has been
deleted.
Amendment of s141 (Continuing application of the repealed
Act, pt 6C)
Clause 9 removes the reference to section 29Q of the State Housing Act
1945 in section 141 of the Housing Act 2003. Section 29Q requires the
Public Trustee to pay the expenses relating to the termination of a housing
trust. Under this section, the chief executive of the Department of Housing
would be liable for any expenses not met by the Public Trustee. However,
as there were no housing trusts in operation at the commencement of the
Housing Act 2003 and all assets and liabilities had previously been
transferred from the Public Trust to the chief executive, the continuing
application of section 29Q is no longer required.
Insertion of new pt 10, div 5
Clause 10 inserts after section 151 a new division 5 "Provision for Housing
and Other Acts Amendment Act 2005" which declares that the provisions
under the Housing Act 2003 as amended under the Housing and Other Acts
Amendments Act 2005, sections 7 and 11, are taken to have commenced on
1 January 2004 under the commencing proclamation.
The commencing proclamation referred to in this section is Subordinate
Legislation 2003 No. 332 made under the Housing Act 2003.
Amendment of sch 2 (Amendments of Act)
Clause 11 provides for the removal of schedule 2, provisions for the State
Housing (Freeholding of Land) Act 1957, sections 5 31. These are
replaced with provisions which:
· give the chief executive power to offer concessions to reduce the
cost of freeholding, to holders of residential perpetual leases, on
conversion of their interest to freehold; and
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Housing and Other Acts Amendment Bill 2005
· provide the legislative basis for any concessions provided for
conversions to freehold undertaken from 1 January 2004, when
the Housing Act commenced.
PART 3 AMENDMENT OF BUILDING AND
CONSTRUCTION INDUSTRY PAYMENTS ACT
2004
Act amended in pt 3
Clause 12 provides for an amendment to the Building and Construction
Industry Payments Act 2004.
Amendment of sch 1 (Amendment of Acts)
The Building and Construction Industry Payments Act 2004 made
amendments to the Queensland Building Services Authority Act 1991
(QBSA Act 1991) including the insertion of a new provision, section
67AAA.
Clause 13 omits the words "that includes" in section 67AAA(1)(b) and
replaces them with "exclusively for". The purpose of the amendment is to
make it clear that:
· if a party enters into a mixed contract to undertake "building
work" and "construction work that is not building work", they
have entered into a "building contract" and the protection
mechanisms of Part 4 of the QBSA Act 1991 apply; and
· if a party enters into a contract solely for "construction work"
that is not "building work" (eg a contract solely for electrical
work), it is not a "building contract" and therefore outside of Part
4A of the QBSA Act 1991.
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Housing and Other Acts Amendment Bill 2005
PART 4 AMENDMENT OF LOCAL GOVERNMENT
ACT 1993
Act amended in pt 4
Clause 14 provides for amendments to the Local Government Act 1993.
Amendment of s4 (Meaning of owner of land)
Clause 15 omits the words "s24" in sections 4(1)(ba) and (bb). The
purpose of this amendment is to ensure that all land subject to shared
equity or instalment contracts under the Housing Act 2003 is rateable land
under the Local Government Act 1993, irrespective of when the contracts
were entered into.
Amendment of s1047 (Application of proceeds of sale)
Clause 16 omits the words "section 1057" in section 1047 (4) and replaces
it with "section 1057 and 1057A".
Replacement of s1057A (Priority of Queensland Housing
Commission preserved)
Clause 17 omits section 1057A and inserts a revised section 1057A, which
· removes the reference to "s 24"; and
· replaces reference to the "commission" with "chief executive
(housing)", meaning the chief executive of the department in
which the Housing Act 2003 is administered.
This ensures that the priority of the State is preserved with respect to the
proceeds of sale where a local government exercises the power of sale in
the event of default. This applies to all properties the subject of shared
equity or instalment contracts irrespective of when they were entered into.
Insertion of new ch 19, pt 11
Clause 18 provides for the insertion of a new Part 11 "Transitional
provision for Housing and Other Acts Amendment Act 2005" and section
1273 "Validation of levying of rates for certain lands", after section 1272 of
the Local Government Act 1993.
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Housing and Other Acts Amendment Bill 2005
This new section applies to a rate levied:
· for the whole or a part of the period from 1 January 2004 to the
commencement of this section (the validation period); and
· for land of which the owner was, for the whole or part of the
validation period, a purchaser of land under a Housing Act 2003
section 113 contract.
The rate is taken to have been, at all times, validly levied.
Amendment of schedule (Dictionary)
Clause 19 inserts within the schedule a definition of "housing Act
contract", which means, a housing Act section 24 contract or a Housing Act
2003 section 113 contract.
The term "Housing Act 2003 section 113 contract" means a contract of sale
entered into under the Housing Act 2003, section 113, under which:
· the purchasing price, other than any deposit, is payable in two or
more instalments; or
· the sale is of a share in a house and land.
PART 5 Repeal
Repeal
Clause 20 provides for the repeal of the Commonwealth and State Housing
Agreement (Service Personnel) Act 1991 No. 54. This Act governed the
handover arrangements of defence housing from the State to the
Commonwealth Defence Housing Authority. These arrangements were
finalised in 1993-94, consequently the Act is no longer required.
© State of Queensland 2005