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Seller's Disclosure - Coggle Diagram

- - - - Young CJ in Eq, Eighth SRJ P/L v Merity (1997) 7 BPR
        A very fine, but real,m distinction exists between defects in title which entitle a person to rescind and defects in quality which do not. What is a defect in title is difficult to define, but usually encompasses the situation where the vendor is unable to convey the full estate which it promised to convey to the purchaser. A defect in quality merel leans that the purchaser obtains the appropriate title to the land but that there are some factors relating to the quality of the property sold which affects its value.
        
        Leases, mortgages, encumbrance easements, statutory charges
      - Faruqi v English Real Estates 919790 1 WLR 963, 967
        By special condition the sale was "subject to entries on the registers of title". General conditions stated the property was sold subject to any covenants, a copy of which could be inspected at the vendor's solicitors offices, the purchaser being deemed to purchase with notice thereof whether or not he had made an inspection
        
        LESSON - if seller knows of a DIT, no matter how small, DISCLOSE!
        
        Vendor was required to disclose in equity
        
        There were restrictive covenants on title, copy of deed had not been produced on first registration; couldn't be produced by solicitors
        
        HELD - specific performance refused
        
        HOWEVER, note the difference in obligations
        
        PATENT
        
        One a buyer could discover on inspection of the property by ordinary diligence
        
        Obvious phenomenon that shows the land is burdened in some way
        
        Because these defects can be 'thrust on a buyer (Yandle & Sons) they must be patent to the eye
        
        Puts a buyer on inquiry to make further searches, etc
        
        Where open contract used, inquiries should be made before contract
        
        If not, can still terminate if seller contract to deliver title free from encumbrances and they are not disclosed
        
        LATENT
        
        The kind of defect a buyer couldn't discover, with ordinary care, by inspection
        
        Yandle & Sons v Sutton
        
        In all these cases [of latent defect]...the vendor knows what the property is, and what the rights to it are. The purchaser is generally in the dark...
        
        So a seller should disclose! (especially where a buyer can't discover the problem
  - - - may be
        
        defective structural improvements
        
        road or rail requirements
        
        contamination issues
      - In OPEN contracts, seller under NO OBLIGATION TO DISCLOSE: CAVEAT EMPTOR
      - Buyer's only redress
        
        misrepresentation (Krakowski
        
        fraudulent concealment
        
        if seller warrants no defects in QOT
- - - - S 47, If 'building work' is carried out on land by any person
        
        The land is sold within 6 years after completion
        
        BEFORE CONTRACT OF SALE, Seller must give buyer
        
        Notice of the building work
        
        Prescribed warning, r22 of the QBCC Regs 2018
        The notice to be given to a prospective purchaser of land under s 47(1) of the Act must -
        (a) state that building work detailed in the notice has been carried out under an owner-builder permit by a person named in the notice
        (b) contain a warning in the following terms -
        'WARNING - THE BUILDING WORK TO WHICH THIS NOTICE RELATES IS NOT COVERED BY INSURANCE UNDER THE QUEENSLAND BUILDING AND CONSTRUCTION COMMISSION ACT 1991.
        
        If not - seller deemed to have given contractual warranty the work was properly carried out
        
        This clause would likely survive merger but leaves buyer with a simple action for damages
    - - Started with Planning (Urban Encroachment-Milton Brewery) Act 2009
        
        Then became Sustainable Planning Act 2009 (Qld)
        
        Now is the Planning Act 2016 (Qld)
        Ch 7, Pt 4 continues the URBAN ENCROACHMENT regime
        
        The purpose of the part is to protect existing uses of particular premises from certain effects of encroachment by new uses in the vicinity of the premises by -
        
        a) providing registration of the premises; and
        b) establishing the responsibilities of particular persons in the area (the affected area) to which the registration relates
        c) restricting particular proceedings in connection with emissions coming from registered premises
        
        S 267 allows for registration (or renewals) of premises such as Lion's XXXX brewery at Milton
      - S 271 Developer making application requests Registrar of Titles record that the Part applies to them
      - S 272 For buyers, if a contract is entered and the developer hasn't requested a record on title, the buyer can terminate (before completion)
      - Urban Encroachment
    - - Statutory disclosure is required through the Building Energy Efficiency Certificate
        
        The disclosure obligations apply to any corporation that owns, lets or sub lets a disclosure affected building and a disclosure affected area of a building are buildings or areas of buildings used or capable of being used as an office with net lettable are greater than 2000 square metres
      - A failure to meet relevant disclosure requirements can lead to significant penalties being applied
    - - Lots and proposed lots in CTS (community title scheme)
        
        BCCMA
        
        s213(1) sellers disclosure requirement for 'proposed lots' - before entering the contract, to give the buyer a 'disclosure statement
        
        Ideally as LCQ p 103 recommends, the disclosure statement (s 213(2)) should be separate from the contract
        
        S 213(4) requires the disclosure statement to be 'substantially complete' when provided to a prospective buyer
        
        S 213(3) requires the disclosure statement to be signed by the seller. Pazcuff
        
        Disclosure statements must be accompanied by a disclosure plan (s 213(2)(a)(ii)) --> reqmts in 213AA
        
        S 214 --> further disclosure statement to correct inaccuracies
        
        Termination
        
        S 212A-B right to terminate where there is no proposed community management statement (must exercise right before settlement)
        
        S 213(5) & s 205A-B right to terminate if seller fails to provide a disclosure statement at all, or before contract, or that is not substantially complete, or that is not signed (must exercise right before settlement)
        
        S 214(4) further statement/material prejudice/21 days
        
        S 214(5) disclosure statement inaccurate, no further variation made (must exercise right before settlement)
        
        S 217(b)(viii) original disclosure statement inaccurate, no further statement, s 217(b)(viii) = (overlapping) further right to cancel the contract, material prejudice (must be exercised no later than the latest of 3 days before completion, 14 days after notice or another day agreed
        
        S217(b) a lengthy list of further rights of termination
        
        S 217A more rights of termination, complex
    - - Fences
        
        Main issue: whether seller needs to disclose the possibility of an order being made
        
        Does this constitute an 'order affecting the property' (REIQ 7.4(2)
        
        Arguably could be an order affecting the property within the seller's warranties
        
        Alternative view: these orders should be restricted to those 'affecting title' (LCQ p. 131)
        
        Orders issued on/after the contract date will be buyer's responsibility (cl. 7.6(1)(b)
        
        After the contract date, if seller receives a copy of relevant notice, must disclose to buyer (cl. 8.3(2)
      - Trees
        
        If a person selling is affected by an application or QCAT order, the seller MUST give a buyer a copy of the application or order BEFORE the buyer enters the contract (S 83)
    - - s 104RB - domestic dwellings must have compliant smoke alarms
      - s 104RK - transferor must give notice to TRANFEREE (not their solicitor) whether compliant alarms installed
      - Must be provided BEFORE POSSESSION - can include in REIQ contract
      - If not? Doesn't affect contract at common law
        
        Fine of 5 penalty units if false or misleading notice
        
        Unlikely to be warranty. Won't allow termination or compensation
        
        Buyer will still need to install compliant smoke alarms to comply with s 104RB
        
        Notice also to be given to Commissioner within 90 days of transfer
    - - Distinction between non-shared and shared (CTS, motels) pools
      - Owners of relevant regulated pools have disclosure obligations
      - Non-shared pools
        
        If a pool certificate has issued
        
        Copy must be provided BEFORE SETTLEMENT to the buyer
        
        If NO pool safety certificate issued
        
        Owner must give buyer notice of no pool safety cert BEFORE CONTRACT
        
        If still no cert after contract and BEFORE SETTLEMENT
        
        Owner must give notice of no certificate
        
        to buyer; AND
        
        QBCC
        
        If certificate issued after contract and BEFORE SETTLEMENT, must give copy to buyer AT OT BEFORE SETTLEMENT
        
        If not? Owner commits offence but contract not invalidated
        
        BUT! REIQ termination rights arise cl 4.2
        
        If buyer takes with no pool safety cert, they must obtain one
    - - All domestic residences post 1/6/1992 must have approved safety switch for general purpose socket outlets
        
        Reg 82 requires notice be provided by transferor to transferee as to whether switch installed
        
        Must be provided before possession -> can include in contract REIQ: ref schedule
        
        Must be given to TRANSFEREE (not their solicitor)
        
        If not? Does not affect contract at common law
        
        Fine of 15 penalty units if false or misleading notice
        
        Unlikely to be warranty. Won't allow termination or compensation
        
        Buyer will still need to install an approved switch within 3 months
        
        Notice also needs to be given to the Regulator within 90 days of transfer (form 24)
    - - Seller must notify buyer of an undischarged
        (i) coastal protection notice; or
        (ii) tidal works notice
        no later than 14 days before settlement s 65
      - If not disclosed, the buyer is bound by the undischarged notice
      - If not? agreement is of NO EFFECT unless buyer
        (i) notifies of an intention to settle despite the non-compliance; or
        (ii) (following settlement) affirms the sale despite non-compliance
    - - Two objectives
        
        Protect consumers buying into property developments
        
        Ensure proposed lots are clearly identified
      - Applies to proposed lots
        will become a lot on the registration of a plan of survey under the Land Act 1994 or Land Title Act 1994
        
        NOT BCCMA, BUGTAM, SBCA
        
        NOT where the sale is part of 'large transaction': s 3(3)(a). (6+ allotments in a single agreement, 2 plus agreements within 24 hours)
      - S 10 -> BEFORE entering the contract the seller is required to supply the buyer with
        
        A disclosure plan and disclosure staement (ss11, 12), OR
        
        a plan of survey (approved by LGA under Planning Act, or by Minister for Economic Development QLS under Economic Development Act 2012 Qld.
      - s 12 - a disclosure statement must state
        
        the seller has given the buyer a dusclosure plan
        
        whether development approval has been granted
        
        that the seller must settle within 18 months, and will give the buyer any other documents required at least 14 days prior to settlement
      - s 13 - Variation of disclosure plan if original was or has become inaccurate
        
        If the contract has NOT SETTLED and buyer would suffer 'material prejudice' they can terminate within 21 days
        
        Wilson v Mirvac Queensland Pty Ltd [2010] QSC 87 (http://www7.austlii.edu.au/cgi-bin/viewdoc/au/cases/qld/QSC/2010/87.html?context=1;query=wilson%20v%20mirvac%20queensland;mask_path=)
        
        disadvantaged substantially, to an important extent
      - If not? TERMINATION RIGHTS
        
        s 13(4) where an inaccuracy is notified by way of further disclosure statement, if the buyer would suffer material prejudice (within 21 days)
        
        s 13(6) where the seller fails to give a further statement, notifying of inaccuracy (requires material prejudice (can exercise up until settlement))
        
        s 10(3) for failure to comply with the preliminary disclosure requirements (can exercise up until settlement)
        
        s 14(5) for failure to settle within 18 months or provide final disclosure documents where necessary (can exercise up until settlement)
    - - s 408 - if the land is either on the contaminate land register or subject to various notices (show cause)
        
        Seller must BEFORE AGREEING TO DISPOSE of the land
        
        Give buyer notice stating the particulars in 408(2)
        
        There is no prescribed form of notice
        
        If not, the buyer may rescind before possession or completion (s 408(3))
        
        Albion Mill FCP Pty Ltd & Anor v FKP Commercial Developments Pty Ltd [2018] QCA 229
        
        Sale and purchase of a development site at Albion
        
        No formal notice given (predecessor to s 208)
        
        Email from buyer indicating awareness of the contamination issue and that legal advice was being sought
        
        But no form of notice was described
        
        HELD - sufficient information given for the purposes of the EPA
        
        Note the ability to rectify the problem of disclosure AFTER CONTRACT BUT BEFORE SETTLEMENT: S 408(5)
        buyer may rescind within 21 days or is deemed to have waived (s 408(6))
        
        Supply of access to a "data room" containing relevant information on contamination
    - - A clause must be inserted into sale contracts regarding maintenance and upkeep of certain "specified prescribed works" (revetment wall, jetty, pontoon, etc)
      - S 15(3) gave the buyer a right to terminate before settlement for failure to comply
      - NOTE: since insertion of new s 57A in Property Law Act 1974 (Qld) on 5 June 2017, there is no longer any right to terminate under Local Law for seller's failure to comply with the disclosure required by this legislation
- - - - (3) The seller warrants that, at settlement
        (a) if the Land is freehold: it will be the registered owner of an estate, in fee simple, in the Land and will own the rest of the Property
        
        1.1(z) "Property" means
        (i) the Land;
        (ii) the Improvements
        (iii) the Included Chattels
      - (3)(b) if the Land is leasehold: it will be the registered lessee, the lease is not liable to forfeiture because of default under the lease, and it will own the rest of the property.
      - (3)(c) it will be capable of completing this contract (unless the Seller dies or becomes mentally incapable after the Contract Date); and
      - (3)(d) there will be no unsatisfied court order or writ of execution of the Property
  - - - (a) the Present Use is not lawful under the relevant town planning scheme
        
        and that has not been disclosed in this contract, the Buyer may terminate this contract by notice to the Seller given before settlement.
      - (b) the Land is affected by a proposal of any competent authority to alter the dimensions of any Transport Infrastructure or locate Transport Infrastructure on the Land
        Gagliardi v Lamont
        Ex parte Christensen
        Grant v McRoss Developments P/L
      - (c) access or any service to the Land passes unlawfully through other Land
      - (e) any competent authority has issued a current notice to treat, or notice of intention to resume regarding any part of the Land
      - (f) there is an outstanding condition of a development approval attaching to the Land under section 73 of the Planning Act 2016 or section 96 of the Economic Development Queensland Act 2012 which, if complied with, would constitute a material mistake or omission in the Seller's title under clause 7.5(2)(d)
      - (d) any Services to the Land which pass through other land are not protected by a registered easement, building management statement or by statutory authority
      - (g) the Property is affected by the Queensland Heritage Act 1992 or is included in the World Heritage List
      - (h) the Property is declared acquisition land under the Queensland Reconstruction Act 2011
      - (i) there is a charge against the Land under s 104 of the Foreign Acquisitions and Takeovers Act 1975