Queensland Bills Explanatory Notes Queensland Bills Explanatory Notes[Index] [Search] [Download] [Bill] [Help]
1
Land Sales Amendment Bill 2001
LAND SALES AMENDMENT BILL 2001
EXPLANATORY NOTES
GENERAL OUTLINE
Objectives of the legislation
The purchase of "off-the-plan" residential building units in Queensland
is governed by the Land Sales Act 1984 ("the Act"), which refers to such
units as "proposed lots".
Due to the construction time required to complete large-scale unit
developments, persons who invest money to purchase proposed lots in
these developments may have to wait several years before they are able to
obtain a registrable instrument of transfer for their lot. The Act is designed
to protect the interests of such persons by requiring that money invested be
held on trust, and that the money is returnable to the person if the vendor is
unable to provide a registrable instrument of transfer within 3.5 years of the
money being invested.
The Act originally allowed the vendor 18 months to provide the
purchaser of a proposed lot with a registrable instrument of transfer to that
lot. This period was increased to 24 months in 1985, to 36 months in 1995,
and to the present 3.5 years in 1997. These increases were made in
recognition of the ever-growing size of residential unit developments in
Queensland.
In October 2001, the Sunland Group Limited ("the Sunland Group")
unveiled an ambitious plan to develop a 78-storey residential unit
development on the Gold Coast. Given the scope of this project, it would
not be possible for the vendor to provide potential purchasers with a
registrable instrument of transfer within the 3.5 year timeframe. Without
any certainty that money invested would not be withdrawn by purchasers
prior to completion of the units, it was unlikely that the Sunland Group
would secure the necessary funding for the development.
Despite the unprecedented nature of this development, it is possible that
similar ventures may be proposed from time to time, and therefore it is
desirable that the Act be able to accommodate such projects. The Sunland
Group development illustrates the need to revisit the period allowed by the
2
Land Sales Amendment Bill 2001
Act for a registrable instrument of transfer to be provided to purchasers of
proposed lots.
A further across-the-board increase of the period would not be justified
on the strength of the Sunland Group development alone. Therefore, it is
proposed to amend the Act to allow the period to only be extended in
exceptional circumstances, upon the approval of the Minister. Prior to the
1997 amendment to the Act, a similar Ministerial discretion existed to
allow a case-by-case extension of the period. This discretion was removed
to promote greater commercial certainty and safeguard the interests of
consumers investing in unit developments. These considerations remain
highly relevant today, and are reflected in this Bill.
The provisions contained in the Bill:
allow for the existing 3.5 year period to be extended in
·
exceptional circumstances to accommodate large-scale
residential unit developments;
require that any extension must be by way of an amendment to
·
the Regulation;
limit the period of extension that may be granted to a maximum
·
of 12 months beyond the existing 3.5 year period; and
ensure that persons investing in proposed lots are advised in
·
writing, before paying any money, that an extension to the period
has been granted.
The Bill does not affect the existing provisions in the Act in relation to
money invested being held on trust, and the ability of persons to obtain the
return of the money after the expiration of the period within which a
registrable instrument of transfer must be provided.
Administrative Cost
As it is not anticipated that applications for extensions will be received
on a regular basis, the cost of processing the applications will be negligible.
Fundamental Legislative Principles
It is a fundamental legislative principle that legislation have sufficient
regard to the institution of Parliament, in that it subjects the exercise of a
delegated legislative power to the scrutiny of the Legislative Assembly.
The Bill enables an amendment to the Regulation (granting an extension of
3
Land Sales Amendment Bill 2001
time) to be made upon the recommendation of the Minister, which arguably
offends this principle. The Statutory Instruments Act 1992 allows for
Parliament to rigorously scrutinise a regulation, and disallow it if
necessary.
Arguably, it is more appropriate for the Minister to adopt a decision-
making role in these matters, because a developer that has obtained all
necessary approvals should not be required to then obtain what would be,
in effect, a further approval from Parliament to proceed. The purpose of
the Act is to ensure consumer protection, and not to provide for planning
approval.
Consultation
The need for this Bill only became apparent at a very late stage of the
planning phase of the Sunland Group development. Given the brief
timeframe for introducing the Bill, there has not been the opportunity to
conduct the usual consultation
NOTES ON PROVISIONS
Short title
Clause 1 sets out the short title of the Act.
Act amended
Clause 2 provides that this Act amends the Land Sales Act 1984.
Insertion of new section 28
Clause 3 introduces a new section 28. That section enables a regulation
to prescribe a period of more than 3.5 years but not greater than 4.5 years
beyond which a purchaser may require the return of any money invested in
a proposed lot. The new period applies only if a notice in an approved form
had been given to the purchaser by the vendor or the vendor's agent before
the purchaser entered upon the purchase of the proposed lot. The notice
4
Land Sales Amendment Bill 2001
will advise the purchaser of the period prescribed by the regulation. The
provision will have no retrospective effect.
© State of Queensland 2001