On 1 December 2010 a new ‘Pool Safety Certificate’ disclosure regime was introduced in Queensland. The new rules commenced on 1 December 2010 with disclosure obligations applying immediately for all contracts where the property sold includes a pool (which includes lots in a body corporate).
The primary effect of these laws in relation to the sale of management rights relates to disclosure within the lot contract. The changes have brought about a new contract for sale of residential lot in a CTS. The relevant contract is now the 4th addition. The new contract includes specific reference to the pool disclosures.
The contract differentiates between a non-shared pool and a shared pool. A shared pool is a pool on common property for use by residents while a non-shared pool in a body corporate would be a private pool forming part of a lot in a body corporate. In most cases a scheme which includes management rights will have a shared pool.
For contracts entered into after 1 December 2010 the law requires that:
- if the shared pool has been inspected by a licensed and qualified building certifier and a ‘Pool Safety Certificate’ issued, the certificate must be provided to the buyer before settlement of the contract (and of course can be provided prior to entry into the contract); or
- if there has not been a ‘Pool Safety Certificate’ issued for the shared pool then:
- ‘Notice of No Pool Safety Certificate’ must be provided to the purchaser prior to entry into the contract; and
- the ‘Notice of No Pool Safety Certificate’ must be provided to the body corporate and the Department of Infrastructure and Planning prior to settlement of the contract. This responsibility will rest with the seller.
The ‘Pool Safety Certificate’ is a Form 23. The ‘Notice of No Pool Safety Certificate’ is a Form 36. These forms can be located on the Department of Infrastructure and Planning website. The forms are intended to help prospective buyers make a more informed decision about purchasing a property.
In the case of a shared pool, even though the body corporate is responsible for ensuring compliance with pool safety standards the seller of the lot is the person to execute the form. If a ‘Pool Safety Certificate’ has not been issued, or the seller does not comply with the above notice provisions, the buyer does not have a right to terminate the contract but the seller may be liable to a penalty of up $16,500.
Although not relevant to the contract or settlement process, certain post settlement obligations are placed on a body corporate once they receive a ‘Notice of No Pool Certificate’. For a body corporate at which only short term accommodation is provided (ie motel, hotel, resorts and back packers’ hostel) the body corporate must ensure by 1 June 2011 that they have obtained their first ‘Pool Safety Certificate’. For any other shared pool (ie permanent residential bodies corporate), they have until 1 December 2012 to ensure that they have obtained their first ‘Pool Safety Certificate’. The aim of the new laws is to have all pools included on the Pool Safety Register by 4 May 2011.
A ‘Pool Safety Certificate’ must be valid if it is to be disclosed. The ‘Pool Safety Certificate’ appears only to have currency for one year.
Therefore the main role as agent for the seller you must play in regards to the new regime is:
- Ask the seller if a ‘Pool Safety Certificate’ exists and arrange for a Form 23 to be completed and executed by the seller (the seller will have to source information form the body corporate to fill in this form).
- If a ‘Pool Safety Certificate’ does not exist arrange for a Form 36 to be completed and executed by the seller.
- Ensure that the new version 4 residential lot contract is used and ensure that the correct items are chosen.