Understanding Statutory Warranties – Units & Townhouses in Queensland

In the REIQ Contract of Sale (released August 2025), sellers of units and townhouses are required to make a series of statutory warranties directly within the contract itself.

On page five of the contract, the seller must confirm certain things about the body corporate, such as whether there are known defects, liabilities, or upcoming resolutions that could affect the buyer.

These warranties are not part of the Seller Disclosure Statement given to the buyer before signing – they are separate legal promises made in the contract under statute.

Previously, this information appeared in the Body Corporate Disclosure Statement, often completed by the body corporate manager. Under the new regime, those statutory warranties have been moved into the contract, which means real estate agents – who usually prepare contracts – must now ensure this section is completed correctly.

Whether you’re a seller, agent, or buyer, understanding these warranties –  and getting them right – is critical to avoid potential disputes.

Key Takeaways:

• Statutory warranties are not dealt with in the Seller Disclosure Statement given to the buyer before signing. A seller cannot simply say “refer to disclosure statement” for statutory warranties about the body corporate or common property. If they do, or leave the warranty section of the contract blank, the law says the seller is actually giving the buyer a warranty that there is nothing about the complex that needs be advised to the buyer.
• If warranties given are inaccurate, the buyer has the right to terminate the contract. If the inaccuracy is discovered after settlement, the buyer may be able to claim damages against the seller. 
• Sellers should gather accurate information early, especially for body corporate properties where records reveal defects or liabilities. If the seller does not know enough about their property to complete the statutory warranty section of the contract, a search to inspect the records of the body corporate should be undertaken.
• Early collaboration between the seller, agent, and conveyancer reduces risk for both the seller and the agent.

What are “statutory warranties”?

A statutory warranty is a promise that a seller gives under statute about certain matters, for example, that there are no hidden defects or liabilities that are not disclosed. In Queensland, some key statutory warranties in the contract of sale relate to the body corporate (sales of units or townhouses). They include warranties in relation to: 

• Defects in the common property
• Unexpected expenses of the body corporate
• Unapproved improvements on common property
• Outstanding by-law contravention notices
• Proposed body corporate resolutions 
• Circumstances in relation to the body corporate likely to materially prejudice the buyer

What are the statutory warranties and what do they mean?

Statutory warranties include:

There are no latent or patent defects in the common property or body corporate assets other than defects arising through fair wear and tear that the seller is aware of, or are disclosed in the body corporate records.

Latent defects are defects that are not readily observable such as structural issues, waterproofing or the like in relation to the buildings in the scheme. Patent defects are those that are noticeable. 

There are no actual or contingent or expected liabilities of the body corporate that the seller is aware of or are disclosed in the body corporate records, that are not part of the body corporate’s normal operating expenses.

These are expenses that are not ordinarily expected to arise. For example, the repainting of the building would normally be something that occurs every ten years, so it is expected. 

There is no proposal to record a new Community Management Statement (CMS)

This would be the result of the body corporate committee advising unit owners of a proposal to change the existing Community Management Statement. This would include a change of the existing by-laws or lot entitlements.  

There are no unapproved improvements on common property benefitting the Lot.

An example of this would be an unimproved garden shed or awning

There are no outstanding by-law contravention notices

If the seller has received a notice from the body corporate that they have contravened the body corporate by-laws, and that contravention has not been remedied, it must be disclosed

There are no proposed body corporate resolutions

If the seller has a copy of a notice of a proposed meeting of the body corporate that will occur, they should advise of the date of the meeting and provide a copy of the notice of the meeting. 

How to Complete the Statutory Warranty Section

This section of the contract should not be left blank. It’s important that each item is completed accurately and in full.

If the seller has nothing to disclose:

• Write “Nil” in each relevant section of the statutory warranties table. 

If the seller does have something to disclose:

• Clearly describe the issue in the space provided.
• If there isn’t enough room, include the full details in a separate annexure, and reference that annexure number in the warranty section.

If the seller doesn’t know enough about the property to accurately complete the section, we recommend a search of the body corporate records be conducted. 

A good rule of thumb: when in doubt, disclose. Full and early disclosure protects both the seller and the agent from later disputes.

Need Help Completing the Statutory Warranty Section?

Because these warranties are now part of the contract, accuracy and timing are more important than ever.

At Keylaw Conveyancing, we can:

• Review your draft contract before it’s signed,
• Arrange a search of body corporate records if the seller is not able to answer questions in relation to the statutory warranties,
• Ensure the statutory warranty section is correctly completed to protect both you and your client.

More Questions?

Contact our team to discuss your upcoming sale or to arrange a pre-contract review. We’ll help you get it right – the first time.

The above is not legal advice, and is general information only.