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12 Jul 13
Gold Coast property owners beware

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New laws to enforce repair works prior to sale of waterfront land

Owners of Gold Coast waterfront property have been hit with new Council requirements which will impact sales transactions.  A new Gold Coast City Council Local Law about works in waterways gives buyers a right to terminate certain land contracts.  Under the new local law, land owners are responsible for the maintenance of prescribed work and are at risk of breach notices for failure to comply.  Environment and planning lawyer, Sarah Wheatley outlines the new laws and their impact on both vendors and purchasers of Gold Coast waterfront property.

Important new obligations for sellers

On 11 June 2013 Gold Coast City Council (Council) made Local Law No. 17 (Maintenance of Works in Waterway Areas) 2013 (Local Law) and Subordinate Local Law 17.1 (Works in a Non Coastal Waterway Areas) 2013

Section 15 of the Local Law requires the seller of a ‘relevant lot’ to ensure that the contract includes a clause dealing with certain matters about ‘specified prescribed work’.  The local law gives a buyer a right to terminate the contract prior to settlement if either:

  • the seller has not included the relevant clause in the contract, or
  • there is an outstanding notice issued by Council in relation to the ‘specified prescribed work’ and the notice has not been detailed in the contract. 

This new local law presents a significant risk for sellers of land near waterways in the Gold Coast City Council area.

What is ‘specified prescribed work’?

Specified prescribed work means a work completely or partly in, on, above or below a waterway area that is:

  • a revetment wall
  • a training wall
  • a jetty, or
  • a pontoon.

The definition of a waterway area is all land and waters in the local government area in a tidal or non-tidal waterway, lake, artificial waterway, coastal wetland and certain drains and channels.

Which land does the obligation apply to?

The requirement under section 15 of the Local Law applies to a contract for the sale of a ‘relevant lot’.  A ‘relevant lot’ means a lot:

  • on which a specified prescribed work is completely or partly situated, or
  • that is waterfront land and which is connected to a specified prescribed work.

A lot is defined by reference to section 10(1) of the Sustainable Planning Act 2009 (Qld) and includes:

  • a lot under Land Title Act 1994 (Qld)
  • a separate, distinct parcel of land for which an interest is recorded in a register under the Land Act 1994
  • common property for a community title scheme under the Body Corporate and Community Management Act 1997, or the Building Units and Group Titles Act 1990
  • a community or precinct thoroughfare under the Mixed Use Development Act 1993, or
  • a primary or secondary thoroughfare under the Integrated Resort Development Act 1987 or the Sanctuary Cove Resort Act 1985.

The Local Law is not entirely clear about whether it is intended to apply to the sale of all lots within a body corporate or resort development, where the common property or thoroughfare is connected to specified prescribed works, even where the lot being sold does not connect to those works.  However, given the serious risks arising from a failure to comply with the Local Law we suggest a conservative approach be adopted by sellers of lots in a body corporate adjoining a waterway area.

The obligation applies to all land sales for a relevant lot. It does not matter if the sale is by a developer, a corporation or by a ‘mum and dad’ land owner.

What does the clause need to include?

The clause must state: 

  • the contract is a contract to which section 15 of the Local Law applies
  • the actual specified prescribed work i.e. the revetment wall, training wall, jetty or pontoon
  • that the Local Law requires the responsible person for the specified prescribed work to maintain and keep the specified prescribed work in:
    • a safe condition, and
    • good working order, repair and condition, including so that the prescribed work can continue to perform its intended function, and
  • whether or not there is an outstanding notice issued by the local government under the Local Law in relation to the actual specified work and, if so, the contents of that notice.

Sellers of property near waterways at the Gold Coast should be careful to comply with this new regulatory requirement.

Further obligations and notices for works

The purpose of the Local Law generally is to provide for the maintenance and repair of works in waterway areas in the Council area.  Works and structures in tidal waters are already subject to substantial regulation under the Coastal Protection and Management Act 1995 (Qld) (Coastal Act).

The Local Law expands on section 124 of the Coastal Act, which requires a person who carries out tidal works to keep the relevant tidal works structures maintained in a safe condition.

Also under the Local Law, an owner of land is responsible for a range of prescribed works beyond the bounds of their property where their property is waterfront land and receives the benefit of prescribed work. The obligation applies even when the owner is not the person who built the structure (section 9 and 11).

The Local Law also gives Council the power to issue a ‘waterway area required work notice’ (Notice) which is broadly similar to  the tidal works notices that the Department of Environment and Heritage Protection can issue under sections 60 of the Coastal Act. The Notice can require a responsible person to build work that is necessary to secure, protect, support or stabilise a part of land or improvements adjacent to a waterway area. Receipt of a Notice could give rise to significant expense for a land owner.

What does the Local Law mean for you?

If you are selling a ‘relevant lot’, ensure your land sale contract complies with section 15 of the Local Law. This will require a special condition as the standard REIQ contract does not currently address this issue.

For sellers of a lot in a body corporate or resort development where the common property or thoroughfare is connected to specified prescribed works, we recommend complying with section 15 of the Local Law, even if the sale lot is not connected to a waterway area.

If purchasing a ‘relevant lot’, consider the state of any specified prescribed work on the lot and the likely repair and maintenance requirements.

Financiers need to be aware of the risk that the Local Law presents to the sale of land near waterways in the Gold Coast area.

Land owners with property containing specified prescribed work, need to be aware that under the Local Law, they are responsible for the maintenance of the specified prescribed work and Council may issue a notice to enforce this obligation.

Whether buying or selling property on the Gold Coast or considering doing so in the near future, it’s crucial that you ensure that the lawyer managing your transaction is up to date with the new Local Law and has a full understanding of the implications of non-compliance.

 

Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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