Queensland’s seller disclosure regime: What are the exceptions?

The new seller disclosure regime will apply to contracts of sale of freehold property that are entered into on and from 1 August 2025, but there are limited exceptions where a seller is not required to provide disclosure. Sellers should also be aware that they cannot contract out of the seller disclosure regime.

General exceptions to seller disclosure

There are some limited circumstances where sellers do not need to give a disclosure statement to buyers. These are set out in section 100 of the Property Law Act 2023 (Qld) (PLA) and are detailed below.

Sellers do not need to provide a disclosure statement:

• where the buyer is the Government, a statutory body, a listed corporation, or a subsidiary of a listed corporation;
• in contracts arising from the exercise of an option, provided that certain conditions are met;
• in certain high-value transactions, where the buyer provides a notice waiving compliance with the seller disclosure regime;
• to give effect to a court order or enforcement warrant;
• in family law transfers pursuant to a binding financial agreement;
• where property is transferred after the owner’s death to a beneficiary of the estate, or pursuant to a court order arising from a family provision claim;
• in certain related party transfers (as defined by section 96 of the PLA), where the buyer provides a notice waiving compliance with the seller disclosure regime;
• where there is a transfer between co-owners to change their interest in the property;
• where there is a transfer to adjust a common boundary or address an encroachment by an adjoining owner; and
• where land that has been compulsorily acquired is sold back to the former owner pursuant to section 41 of the Acquisition of Land Act 1967 (Qld).

The seller disclosure regime also does not apply to the sale of a proposed lot (e.g. under an off-the-plan contract) or a transfer of a leasehold interest, because these interests are outside the definition of what constitutes a ‘lot’ for the purposes of section 95 of the PLA.

Sellers should take notes that these exceptions do not absolve a seller from providing disclosure that is required under other legislation, such as where the property is on the contaminated land register under section 408 of the Environmental Protection Act 1994 (Qld).

Exceptions to disclosure for certain sellers

There are also specific exceptions where the seller is:

• the Council, and the property is being sold to recover overdue rates or charges; and
• the Government, and where the buyer has been a tenant of the property for at least 3 years immediately before entering into the contract.

If the Council or Government wish to rely on these specific exceptions, a notice must be provided to the buyer stating that the seller is not required to comply with the seller disclosure regime and the buyer needs to make its own enquiries about matters affecting the property.

No exception for mortgagee sales

There is no specific exception where the seller is a mortgagee or receiver. The policy reason for this is that the mortgagee or receiver should have the necessary knowledge of the property or be able to obtain searches to adequately comply with the disclosure regime.

Sales by a mortgagee or receiver will need to comply with the seller disclosure regime, unless another exception applies (such as a court order). It will be interesting to see whether the seller disclosure regime changes how lenders enforce loans in default.

Option agreements

If an option agreement is entered into before 1 August 2025, then, pursuant to section 251(2) of the PLA, the seller disclosure regime will not apply to the contract arising from the exercise of the option.

The seller disclosure regime will apply to option agreements (and the resulting contract of sale) where the option agreement is entered into on or after 1 August 2025.

Where the grantor (i.e. seller) provides a disclosure statement and the relevant documents to the grantee before the option agreement is entered into, then the grantor is not required to provide another disclosure statement (and the relevant documents) to the grantee. This is if an option is exercised which results in the grantee entering into a contract of sale for the property, as buyer.

If, however, the grantee exercises the option and nominates a third party buyer to enter into a contract of sale with the seller for the property, as buyer (whether that entity is related to the grantee or not), the exception to seller disclosure will not apply and the seller will need to provide a disclosure statement to the third party buyer before the contract is signed.

Depending on the terms of the option agreement, there could be a lengthy period between the grant of the option and the eventual exercise of the option. There will need to be mechanisms built into option agreements to appropriately mitigate the risks associated with seller disclosure and the buyer’s potential termination rights.

High-value transactions

For transactions involving property with a sale price of more than $10 million (including GST), a buyer can give notice to the seller waiving compliance with the disclosure regime. This amount may be changed by regulation.

This scenario will primarily apply to commercial property, large development sites, and luxury residential property. These types of transactions generally involve sophisticated parties and may involve some form of due diligence investigations as part of the contract. If the sale price threshold is lowered by regulation, then it could impact a larger scale of transactions.

It is important for buyers to obtain legal advice before waiving compliance, as a waiver results in buyers losing the termination right afforded under the PLA.

Exceptions require legal advice and a keen eye for detail

While exceptions exist for the seller disclosure regime, the cost of getting compliance wrong can be high. Macpherson Kelley’s Queensland Property lawyers are across all the relevant legislation and exceptions and can provide expert advice on the right option for you.

Contact our team to discuss the incoming regime and how it might affect the sale of your property.

The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.