Residential Reform – New REIQ Residential Contracts Released

On 7 June 2024, updated editions of the Contract for Houses and Residential Land (19^th Edition) and the Contract for Residential Lots in a Community Title Scheme (15^th Edition) were released. With these new editions comes several notable changes that both buyers, sellers and agents should be aware of, specifically in relation to the recent rental law reforms introduced by the Queensland Government. In this article our commercial and property law team examines the newly published REIQ contracts and how they will affect the rights of parties moving forward.    

Changes To Residential Tenancies And Rooming Accommodation

Significant amendments to the Contract for Houses and Residential Land (19^th Edition) as well as the Contract for Residential Lots in a Community Title Scheme (15^th Edition) have been made primarily in relation to the Residential Tenancies and Rooming Accommodation Act 2008 (‘RTRA Act’). The RTRA Act was recently amended by the Residential Tenancies and Rooming Accommodation and Other Legislation Amendment Act 2024 (‘Amending Act’), which came into effect on 6 June 2024.

Under the Amending Act, the RTRA Act was amended as follows:

• Rent Limit – landlords are prohibited from increasing the amount of rent payable by a tenant under a residential tenancy agreement, or resident under a rooming accommodation agreement, within twelve (12) months from the date of the last rent increase. It should be noted this prohibition applies regardless of whether there has been a change of tenant or landlord.
• Evidence of Rent Increase – tenants may request, by written notice, that a landlord (or their agent) provide them with evidence of the day that the rent was last increased for the residential premises. Examples of such evidence may include:
  • a copy of the previous tenancy agreement for the residential premises;
  • a copy of the rent ledger for the residential premises; or
  • a written rent increase notice.

Evidence must be produced by the landlord (or their agent) within fourteen (14) days of the tenant’s request. This provision also applies to residents under a rooming accommodation agreement.

Seller’s Obligations

Accordingly, sellers under the new editions of the REIQ contracts will, in addition to their current obligations, now be required to:

• disclose to the buyer in the contract:
  •  whether the property being sold has been subject to a residential tenancy agreement or a rooming accommodation agreement at any time within the last twelve (12) months prior to the contract date; and
  •  the date of the last rent increase if the property has been subject to a residential tenancy agreement or a rooming accommodation agreement in the last twelve (12) months, provided that the seller is not exempt under the RTRA Act;
• deliver to the buyer at settlement, documentation and evidence of the last rent increase sufficient to satisfy the RTRA Act; and
• provide warranties that:
  • the statements made in the contract in relation to residential tenancy agreements and rooming accommodation agreements are true and correct; and
  • the seller has otherwise complied with sections 91 and 93 of the RTRA Act.

While these obligations may seem trivial and simple enough to meet, the penalties for failing to comply with the above obligations can be significant.

Buyer’s Rights

Where a property, or any part of it, has been rented out at any time in the last twelve (12) months and the seller fails to disclose this, or provide evidence of the last rent increase to a buyer before settlement, the buyer may be entitled to terminate the contract. This is since this newly imposed disclosure obligation on the seller is defined in the REIQ contracts as an “essential term”.

Under the REIQ standard form contracts, where a party is in breach of an essential term, the party who is not in default (i.e. the buyer in this example) may immediately terminate the contract, sue the defaulting party (i.e. the seller) for damages and reclaim the deposit paid, including any interest earned.

Therefore, buyers will now have a continuing termination right for the sellers failure to comply with these reforms.

Ramsden Lawyers – How We Can Help

At Ramsden Lawyers, we are committed to providing our clients with transparent, thorough, and trusted advice to ensure compliance with appropriate legislation while negotiating the best possible deal for their property transactions.

If you are seeking legal advice or assistance with your conveyance or general property law matters, Ramsden Lawyers can assist you. We are happy to arrange an obligation-free initial consultation to assist you in navigating the procedures set out under the relevant legislation for your circumstances.

The content of this article is intended to provide general guidance to the subject matter and must not be relied on as legal advice. Specific advice should be sought about your circumstances.