Amendments were passed by the Queensland Parliament on 7 October to implement recommendations from the National Competition Policy Review of the Consumer Credit Code (the Code). These amendments are expected to commence next year.

The amendments have been brought about by the Justice Legislation Amendment Bill 2008 and ensures “terms sale of land”, “conditional sale agreements” and “tiny terms contracts” are brought within the scope of the Code. 

A terms sale of land (a sale on ‘vendor’s terms’ or a ‘wrap loan’) is a sale of land under which the purchase price is payable by instalments.  The vendor lets the purchaser into possession but retains title until conveyance following the final payment. 

A conditional sale agreement (or ‘Romalpa agreement’) is a sale of goods under which the purchase price is payable by instalments.  The seller delivers the goods to the buyer but retains title until the final payment. 

Tiny terms contracts are contracts where the cost of credit is incorporated into the cash price and the transaction is represented as a sale of goods by instalment (without any credit charges). 

Technical amendments have also been drafted to capture contracts containing instalment payments that exceed the cash price of the goods, which are related to the contract for the actual sale of the goods. 

These practices are arguably already covered by the Code as it is currently drafted. However, due to doubts raised in the National Competition Policy Review of the Code, it was recommended the Code be amended through technical redrafting to put the situation beyond doubt.