The PAMDA mess rolls on. Let’s examine the cost paid by Queensland families and businesses for each month the promised reform is delayed.
Transaction costs for buyers & sellers
The complexity of PAMDA compliance means that half of the time lawyers devote to sales contracts is allocated to PAMDA compliance. It also means that people selling homes must pay twice the legal charges that would be payable without PAMDA.
According to RP Data, there were about 140,000 Queensland house, land and unit sales in 2009 – 11,600 per month. At $700 per sale, residential property sellers paid more than $4 million monthly on PAMDA compliance!
Buyers also pay for PAMDA – it represents about one third of the conveyancing fee. Assuming legals of $1,200, the aggregate cost of PAMDA compliance paid for by buyers of residential property is about $4.6 million every month!
These figures do not include commercial transactions that are also caught by PAMDA because they relate to residential property. So add in a very conservative $2 million for monthly compliance for commercial buyers and sellers too.
One estimate has put the expenditure to buyers, sellers and real estate agents for legal disputes and court claims at $24 million annually – $2 million every month. This is probably on the low side.
Many contract PAMDA terminations are simply accepted without a dispute, mainly to avoid the high costs. Buyers and sellers incur aborted sale fees, advertising fees, fees for the cancelled conveyance, removalist costs etc.
Stress and anxiety
The emotional havoc caused to an innocent family whose house sale has been terminated because of inadvertent non-compliance is incalculable. Yet this happens weekly. Families have to live through the resulting turmoil and uncertainty – disrupted schooling, absences from work, sleepless nights.
The total bill is more than $12.6 million monthly, not including the immense personal cost. This is money that families and businesses could be much better off spending on children’s schooling, household expenses or staff & equipment.
Is the huge cost PAMDA extracts from Queenslanders reason enough for the government to act now to fix it?