New Property Law Legislation- To be Confirmed
In this article we explore the new Property Law Act 2023 (the 2023 Act) and any changes in relation to the appointment of Statutory Trustees as compared against Section 38 of the Property Law Act 1974 (Qld) (the 1974 Act).
The 2023 Act passed Parliament on 25 October 2023 and received Royal Assent on 2 November 2023 with the commitment date to be set by proclamation. Commencement of the 2023 Act has been delayed allowing for consultation, education and to allow affected industries’ (legal, financial, property) participants to prepare.
The 2023 Act is set to introduce substantial modifications aimed at simplifying, streamlining, and modernising the current legal framework. Subdivision 2 (Section 33 to 40) of the 2023 Act deals with the sale and division of co-owned property including the appointment of a Statutory Trustee.
Applicable changes for Statutory Trustee appointments
In Queensland, an application to Court for the appointment of statutory trustees is currently made pursuant to Section 38 of the 1974 Act. In this specific context, the first part of this Section provides that:
Where any property is held in co-ownership the court may, on the application of any of the co-owners, appoint trustees of the property and vest the same in such trustees, subject to encumbrances affecting the entirety, but free from encumbrances affecting any undivided shares, to be held by them on the statutory trust for sale or on the statutory trust for partition.
Where the entirety of the property is vested in trustees, those trustees shall, unless the court otherwise determines, be appointed trustees on either of such statutory trusts.
Where the entirety of the property is vested at law in co-owners the court may appoint a trustee corporation either alone or with 1 or 2 individuals (whether or not being co-owners), or 2 or more individuals, not exceeding 4 (whether or not including 1 or more of the co-owners), to be trustees of the property on either of such statutory trusts.
In contrast the 2023 Act is much clearer in terms of the power of the Court, the type of orders and considerations for the appointment of Statutory Trustees to sell a property and the extent to which the Court can set out the process to follow.
Some of our key observations from our brief reading of the 2023 Act are as follows:
Section 33 – now provides the basis of making an application to appoint a Trustee.
Section 33 – provides a specific timeframe for an applicant to provide a copy of the application to any party holding a security interest, within 30 days from appointment date.
Section 37 – now provides specific considerations in making a decision either appoint or remove a Trustee and types of Orders that can be made.
Section 39 – provides a more prescriptive approach to the terms of the Orders Court can make (expanded below).
No apparent requirements or restrictions in relation to who / how many persons can be appointed as statutory trustee, including situations where the co-owner may seek to be appointed.
No apparent requirement to consult with co-owners during the process.
Co-owners remain entitled to make an offer to purchase on terms set by the Court however there does not appear to be any specific mention of the co-owner making the offer, being entitled to not pay a deposit or apply a set off or accounting of the purchase money instead of paying same.
As highlighted above, the 2023 Act is also much more prescriptive with Section 39 (1) specifying the Court made any other order it considers appropriate, including any of the following:
(a) an order that the property be sold by private sale or at auction;
(b) an order that the co-owners may purchase the property at the sale or auction mentioned in paragraph (a);
(c) for a private sale—an order that the sale be at market value as determined by an independent valuation;
(d) for an auction—an order that the reserve price be the reserve price set by the court;
(e) an order that an independent valuation of the property take place;
(f) an order that a sale be completed within a stated time;
(g) an order that the costs of the sale be paid—
(i) by 1 or more of the co-owners; or
(ii) from the proceeds of the sale;
(h) an order that the sale and division of the proceeds of sale or the physical division of the property be subject to stated terms and conditions;
(i) an order that any document be produced or other thing done that is necessary to enable an order to be carried out effectively.
Other key changes
The other key changes in the 2023 Act (which Statutory Trustees will need consider) include:
Statutory Seller Disclosure Scheme: The 2023 Act introduces a broad statutory seller disclosure scheme whereby Sellers must provide a standardised disclosure statement containing prescribed information about the property. Although it would appear on face value this may not strictly apply to sales mandated by the Court.
Enforceability of Easement Covenants: The 2023 Act provides clarity around the enforceability of easement covenants, ensuring that they are legally binding and enforceable against subsequent landowners.
Leases: The 2023 Act introduces new terms to clarify the rights of lessor’s and lessee’s around the effect of transfer of reversion of lease by lessor, lessor's consent to assignments, enforceability of covenants, and release of previous assignor on subsequent assignment.
How can QSAS help?
Wherever you’re located, the QSAS team can help you find the right solution to resolve your (or your client’s) property dispute. Contact us today for a confidential, no-obligation consultation to find out more about the options that might be available and how a statutory trustee appointment may assist.