LNP TILTS PLAYING FIELD IN FAVOUR OF DEVELOPERS

Media Release

Shadow Attorney-General Yvette D’Ath says Newman Government amendments to laws covering the sale of property in the state are designed to benefit developers at the expense of consumers.
During debate on changes to the Land Sales Act, Ms D’Ath said the LNP was allowing developers to impose higher deposits on potential purchasers.
She said at present there was a cap of 10% of the total purchase price which could be charged as a deposit by a developer.
“This Bill increased from 10% to 20% the cap on deposits that can be charged by developers,” Ms D’Ath said.
“Once the deposit is over 10%, the Property Law Act provides that the contract is an ‘instalment contract’."
“Under an instalment contract, the deposit is still liable to be forfeited and retained by the vendor in the event of a breach of contract by the purchaser."
“But an instalment contract carries with it certain protections for buyers, including the right to caveat. Under the LNP’s changes the threshold at which those protections apply is raised to 20%, leaving buyers exposed."
“There are two concerns about raising the limit on what can be charged as a deposit. The first is the question of entry into the market and housing affordability, particularly for first home buyers."
“The Opposition is concerned about any move that makes it harder for Queenslanders to buy a home.”
Ms D’Ath said the government had outlined a list of benefits for developers flowing from the changes, but none for property buyers.
The benefits for developers included making projects more attractive to financiers; improving the financial viability of large off-the-plan projects; and preventing some purchasers including those from overseas from walking away from contracts and carrying the more affordable loss of a 10% deposit.
“But these benefits are all for the benefit of developers. Nowhere is any benefit to purchasers identified,” Ms D’Ath said.
“The other concern with the possible lifting of the deposit cap to 20% is that the amendments allow for the forfeiture of the full amount of the deposit."
“Increasing the amount of deposit that may be forfeited under a contract passes a very significant risk to a purchaser."

“The changes allow the full 20% to be forfeited, even if the loss to the seller is nowhere near that amount,” Ms D’Ath said.