1. PAMDA SPLIT and the New Property Occupations Bill Redmond + Redmond Russell Sparke – Special Counsel Disclaimer: The content of this presentation is a general guide and is not specific advice. You should obtain specialist advice about your particular circumstances. REDMOND + REDMOND

2. Property Occupations Act Property Occupations Act 2014 was passed by Parliament on 7 May 2014 Commencing on a date to be proclaimed – end 2014/start 2015 after industry consultation – currently in progress Purpose Repeal complex Property Agents and Motor Dealers Act 2000 (Qld) PAMDA and replace it with industry specific legislation. Motor Dealers and Chattel Auctioneers, Commercial Agents and Agents Financial Administration Bill were introduced at the same time. REDMOND + REDMOND

3. New definition of Residential Property Only applies to a Contract (including a contract granting an option to purchase) for the sale of “residential property”, with exemptions for:- contracts formed at or after auction; and Because of the exercise of options; or With sophisticated buyer “Residential Property” is defined as land that is used or intended to be used for residential purposes but does not include land used primarily for the purposes of industry, commerce or with sophisticated buyers. Query “Vacant land” Resulting in greater certainty on whether the Property Occupations Act will apply. REDMOND + REDMOND

4. No more Form 30c Warning Statement or Form 14 Information Statement The Act removes the requirements under: - PAMDA for a Form 30c Warning Statement; and The Body Corporate and Community Management Act 1997 (Qld) BCCM for a Form 14 Information Sheet for the sale of a unit or apartment. To be attached to the Contract And there will no longer be a requirement for a clear statement to be given directing the buyer’s attention to those forms. REDMOND + REDMOND

5. No more Form 30c Warning Statement or Form 14 Information Statement (cont’d) Under the Property Occupations Act:- The Contract will need to include a prescribed statement that appears once only immediately above the execution clause for the buyer on the same page with words to the effect:- The Contract may be subject to a 5 business day statutory cooling off period. A termination penalty of 0.25% of the purchase price applies if the buyer terminates during the statutory cooling off period. It is recommended the buyer obtain an independent property valuation and independent legal advice about the Contract and their rights during the statutory cooling off period before signing the Contract. (max penalties up to $22,000 for individuals or $110,000 for corporations) Requirement to provide a Disclosure Statement and the ability of the buyer to terminate under BCCM will remain. REDMOND + REDMOND

6. Termination Rights for Buyers Removed Under PAMDA and BCCM a buyer may terminate a Contract if a seller fails to give the clear statement directing the buyer’s attention to the Form 30c Warning Statement and if an apartment sale the Form 14 Information Sheet Under the Property Occupations Act the seller or the seller’s agent will commit an offence for failing to include the prescribed statement, but the seller or the seller’s agent’s failure will not give a right to the buyer to terminate the Contract. REDMOND + REDMOND

7. The Cooling Off Period The Cooling Off Period will remain Contracts formed at Auction will continue to be exempt from being a “relevant contract” Plus further exemptions from being a relevant contract if: - The contract is entered into with a registered bidder for an auction no later than 5pm on the second clear business day after the property was passed in at auction. The contract is formed because of the exercise of an option granted under an earlier contract; if the parties are the same; or Purchase by the buyer of at least three lots at the same time whether or not in the same contract. The buyer is sophisticated. REDMOND + REDMOND

8. Waiving the Cooling Off Period Under PAMDA the Cooling Off Period may only be waived by the buyer’s lawyer giving a Form 32a lawyer’s certification to the seller. The Property Occupations Act removes this requirement and allows the buyer to waive or shorten the Cooling Off Period by written notice to the seller. REDMOND + REDMOND

9. Termination Under PAMDA the termination notice needs to refer specifically to the section in PAMDA entitling the buyer to terminate and be dated. The Property Occupations Act will remove those technicalities of termination during the Cooling Off Period. REDMOND + REDMOND

10. Lawyer’s Independence Under PAMDA a buyers lawyer is required to give a Form 32a Lawyers Certification to the buyer. The Property Occupations Act will remove this requirement. REDMOND + REDMOND

11. Changes affecting Agents Remove the maximum cap on real estate agents commission, to increase competition Remove the requirement for an Agent to disclose the amount of commission they will or expect to receive Allows an agent to obtain a commission where the agent has a beneficial interest, provided that the agent has disclosed that interest and it has been acknowledged by the seller. Extends the maximum term for a sole or exclusive agency appointment from 60 days to 90 days Removes the requirement for Property Developers and their employees to be licensed. Various other changes reducing the number of licence categories and loosening the regulations relating to resident letting agents. REDMOND + REDMOND

12. Changes affecting Agents cont’d Requirements and prohibitions on agents in relation to representations about price Removal of the requirement by agents to give disclosure to buyer’s of vacant land on which a residence cannot lawfully be constructed. REDMOND + REDMOND

13. What’s next Very Important to understand the new requirements and prepare for the commencement of the Act. What action is required will depend on the facts of each Contract. REDMOND + REDMOND