There is a hidden trap in the Fire and Rescue Service Act 1990 (Qld) (‘the Act’). The effect of it is that under the standard REIQ Contract a seller of residential property may be leaving themselves open to prosecution despite honestly disclosing the fact that a smoke alarm is not installed in the premises!
As an owner of residential premises, it is your obligation to install a compliant smoke alarm in your dwelling. And so you should, for obvious reasons. A less obvious reason is that if you don’t install one you are exposed to a potential penalty of a maximum of $375.
Under the Act, a seller must give a buyer notice of whether a compliant smoke alarm has been installed in the residence. Failure to give this notice may also result in a maximum penalty of $375, should you have the misfortune to be prosecuted.
One might think that this would be sufficient to ensure honesty when completing a REIQ contract. However, to be sure, the Act also makes it unlawful to state anything about smoke alarms in the contract which is false or misleading. And therein lies the dilemma for sellers: if you do not have a smoke alarm installed in your residence, you are legally liable to disclose that fact but disclosure does not excuse you from the potential liability of the $375 fine.
What about (if you haven’t installed an alarm) leaving that part of the contract blank. Do this and you may be exposed to yet another $375 fine for misleading the buyer. So where does all this leave Agents right now? You must tell sellers that the Seller:-
- must honestly disclose the correct situation in regards to the installation of the alarm;
- is potentially liable to a fine of up to $375 for not having installed the alarm;
- can lessen the risk of prosecution by installing an alarm as soon as possible and before settlement; and
- should tell their solicitor of any change of status of an alarm installation prior to settlement.
Solicitors have to disclose in transfer documents the smoke alarm status of each residence. This smoke alarm data is sent to local councils and it is quite likely that they will launch prosecutions for breaches.