Statutory Warranties for Units and Townhouses in Queensland
Introduction
If you are selling a unit or townhouse in Queensland, there is an extra layer of legal responsibility that often gets overlooked.
In addition to the Seller Disclosure Statement, you are required to give statutory warranties within the REIQ Contract of Sale. These are legal promises about the body corporate and the property being offered for sale, and they must be completed correctly before the contract is signed.
These warranties do not form part of the disclosure statement. They sit separately in the REIQ contract and cannot be replaced by simply referring back to your disclosure documents.
What Is a Statutory Warranty?
Statutory warranties are statements you make in the contract confirming what you know about the body corporate and common property.
They apply specifically to properties in a community titles scheme, such as units and townhouses. If you are selling a freestanding house, this section does not apply.
When you sign the contract, you are confirming that, to your knowledge and based on the body corporate records, there are no hidden issues that could negatively affect the buyer unless you have clearly disclosed them.
What Are You Actually Confirming?
By completing the statutory warranty section, you are effectively saying that there are no undisclosed problems with the building or common property, no unexpected financial liabilities sitting with the body corporate, and nothing coming up that could materially impact the buyer.
This includes things like defects, upcoming major expenses, unresolved by-law issues, or proposed decisions within the body corporate that could affect ownership.
It is not enough to assume that this information sits somewhere in the body corporate records. You are required to actively consider what you know and what those records reveal, and then accurately reflect that in the contract.
You Cannot Rely on the Disclosure Statement
One of the biggest mistakes sellers and agents make is thinking the disclosure statement covers the statutory warranty obligation when selling units and townhouses in Queensland, it does not.
Statutory warranties deal with matters that are not included in the disclosure statement. Writing “refer to disclosure statement” or leaving the section incomplete is not acceptable and can create serious legal risk. In fact, if the section is left blank, the law can treat this as you confirming that there is nothing to disclose at all. Not sure what a Sellers Disclosure statement is? Learn more about this new legal requirement.
What Happens If You Get It Wrong?
If a statutory warranty turns out to be incorrect or incomplete, the buyer has the right to terminate the contract within the relevant timeframes. If the issue is discovered after settlement, the buyer may still have a claim against you for compensation. This is why these warranties matter. They are not just administrative. They carry real legal consequences.
How to Approach It Properly
The safest approach is to deal with this early.
Before the contract is prepared, you should review the body corporate records and understand what is actually recorded about the scheme. If you are unsure, a formal records search should be undertaken so you are not relying on guesswork.
If something exists that could affect the buyer, it should be clearly disclosed in the contract. Trying to minimise or ignore issues is where sellers get into trouble. A simple way to think about it is this. If the buyer would want to know about it, it should be disclosed.
How This Fits With Seller Disclosure in Queensland
For units and townhouses, there are two separate obligations that work alongside each other. The Seller Disclosure Statement is provided before the contract is signed and includes prescribed documents such as body corporate information.
The statutory warranties sit inside the contract and require you to confirm specific matters about the body corporate that are not covered in the disclosure statement. Both are important, and both need to be done correctly.
Final thoughts
Statutory warranties are one of the easiest parts of a contract to overlook and one of the quickest ways to create problems if handled incorrectly. They require more than a quick glance or a generic answer. They require a proper understanding of the property and the body corporate behind it.
Taking the time to get this right will reduce risk, avoid disputes, and help ensure your sale proceeds without unnecessary complications.
Disclaimer
The information on this page is provided for general guidance only and does not constitute legal advice. Seller disclosure requirements can vary depending on the property, transaction type, and individual circumstances.
While care has been taken to ensure this information is accurate at the time of publication, sellers should not rely on this page as a substitute for professional advice. For guidance specific to your property or situation, please contact the Sellers Disclosure QLD team to discuss your disclosure obligations and obtain tailored assistance.