Delays, risk, and confusion: Qld’s seller disclosure laws create complexity

According to Kollosche managing director, Michael Kollosche, the changes have added increased risk and responsibility for both agents and sellers.

In particular, he said there can be very serious consequences for both parties from even minor, inadvertent, or purely technical omissions in the seller's disclosure material.

“If a prescribed certificate (i.e. a document required to be given in addition to the Form 2 Seller Disclosure Statement) is not given before the contract is entered into, that can create a termination right up to settlement, even where there is no real prejudice to the buyer,” he told REB.

Kollosche said that, as a result, agents and sellers may be left exposed if they were under the impression there was a binding contract, as a technical risk still remained.

For agents, he said, there was a burden to monitor document compliance and expiry issues more closely, despite those matters being highly technical and often legal in nature.

Sunstate Conveyancing’s Bec Petroff said agents now had a larger obligation to ensure the information provided in the Form 2 was accurate, complete and supported by evidence at the time of signing.

However, she said there had been confusion around who took on the risk, with many agents incorrectly believing solicitors were responsible for ensuring the documents were correct.

“For agents in particular, under the Property Occupations Act, they must take reasonable steps to ensure the information is correct. That means they can’t just pass it off to a solicitor and assume all risk is removed,” she said.

She added that there was uncertainty about which searches were actually required and which were considered “best practice.”

Additionally, she said that cheaper Form 2 providers had been cutting corners, creating inconsistency across the market and leaving agents and sellers exposed without realising.

For Kollosche, the Form 2 requirements had also seen the transaction process dragged out longer, as it required sellers to gather prescribed documents before a compliant contract package could be issued.

He said delays can occur due to documents being difficult to source, expiring, or needing to be refreshed if the property did not sell immediately.

“This has all but removed the option for a buyer or seller to enter into a quick off-market transaction unless the purchase price exceeds $10 million, where the buyer has the ability to waive its right to receive a Seller Disclosure Statement,” he said.

However, Petroff said the disclosure process shouldn’t usually result in delays unless agents or sellers cut corners.

“Where delays occur is when agents list properties without having the Form 2 ready, or when incomplete or cheap disclosures need to be redone once a buyer is found,” she said.

Despite some complexities, she said the laws were doing what they meant to do by granting buyers greater transparency upfront and helping them make more informed decisions.

“They’re making more informed decisions before signing, which reduces disputes later,” she said.

“It also gives them confidence in what they’re purchasing – particularly around things like zoning, contamination, pool compliance, and infrastructure,” she concluded.