How to exit a shared Queensland house: withdrawal, resale, wind-up

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Kooky

Builder of Shaka, the payment router that pays every agent their commission on closing date.

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An owner who wants out of a house in Toowoomba knows the drill. An agent is appointed, the property is advertised, a buyer signs a contract, the transfer is registered and the money arrives at settlement. The owner decides when to start and at what price to stop.

A person who holds one five-hundredth of that same house through a scheme, a unit register or a token has no such drill. The house is not theirs to list. What they own is an interest in the vehicle that owns it, and the ways out are set by the vehicle's constitution, by the Commonwealth Corporations Act and by whoever is prepared to buy the interest from them. The Queensland rules about agents, contracts and the land register only come into play if the vehicle itself decides to sell the land.

This guide sets out each route as the published sources describe it: the withdrawal rules for registered schemes as the Australian Securities and Investments Commission (ASIC) explains them, what ASIC says about platforms where interests change hands, how a sale of the underlying property is decided and carried out in Queensland, and how the proceeds reach holders. It closes with the contrast case, co-owners who are on the title themselves and who can go to court under the Property Law Act 2023. It describes mechanisms. It does not say which way of holding property is better.

Two different things to sell

The first distinction is between the asset and the interest. The asset is the lot: land in Queensland, recorded in the freehold register. The interest is a claim on the arrangement that holds the lot.

ASIC's Information Sheet 225, the regulator's guidance on digital assets, last modified on 30 April 2026, gives an example that shows the gap. In its Example 9, a company issues tokens described as part interests in an apartment building. Investors' money buys the building, the company goes onto the title as nominee for the investors as a group, the company leases the apartments, and profits after costs are held in an account for that building. ASIC's reading is that the token is likely to be an interest in a managed investment scheme. Nothing in the example puts a token holder on the title.

Two consequences follow for anyone thinking about the way out. A holder cannot sell the building, or a physical part of it, because the holder is not the registered owner. And a sale of the holder's interest is not a sale of land: it is a dealing in whatever the interest is in law, which on ASIC's analysis is likely to be a financial product. The table sets the three positions side by side.

The first route: asking the scheme for the money back

In a managed fund that holds shares or cash, the usual exit is a withdrawal: the holder asks the operator to redeem units and is paid from the fund. For property, ASIC's own investor material starts from the opposite assumption.

The regulator's guide for investors in unlisted property schemes, published in November 2012, says that many property schemes do not offer withdrawal rights at all, meaning the investor cannot take money out before the scheme ends. Where early withdrawal is allowed, the guide describes it as the investment manager buying back units, usually at their value at that time. It warns that an investor might wait 12 months or longer for the money, that a scheme faced with many requests at once may cap the number of units that can be cashed out or freeze withdrawals altogether, and that the amount paid may be less than expected if the value of the scheme's assets has fallen.

The guide turns this into a disclosure test. Its seventh disclosure principle, "Withdrawing from the scheme", expects the manager to say whether investors have withdrawal rights at all and, if they do, how the rights are exercised, what conditions apply, the longest time an investor might wait and any significant risk that could stop the money being paid.

For a structure built on tokens, ASIC's Example 9 shows a softer version of the same idea. The issuer in that example may, but is not obliged to, buy back some tokens from time to time using retained profits. A discretion of that kind is not a withdrawal right. It is an option the issuer holds, not one the investor holds.

Liquid and non-liquid: the line the Corporations Act draws

For a registered scheme, the law sorts withdrawals by a single test, and a scheme whose main asset is one house sits on a predictable side of it.

ASIC summarised the framework in a consultation paper on withdrawal rights and scheme liquidity, CP 84, issued in July 2007. As that paper describes the Corporations Act, section 601GA(4) deals with what a scheme's constitution must provide if members are to have a right to withdraw: procedures that are fair to all members. Section 601KA then separates two cases. While a scheme is liquid, members withdraw as the constitution provides. While it is not liquid, withdrawals may be made only under a formal withdrawal offer, following the procedure in sections 601KB to 601KE.

A scheme is liquid, on the paper's summary, when liquid assets account for at least 80 per cent of the value of scheme property. Liquid assets are things such as bank deposits and marketable securities, together with other property the operator reasonably expects can be turned into money at market value within the period the constitution allows for meeting withdrawal requests. Whether a single residential property could count as liquid on that definition depends on the period written into the constitution and on the operator's reasonable expectation. That is a question for each scheme's documents, and the sources read for this guide do not answer it in general terms.

ASIC's more recent consumer material uses the same threshold from the other direction. Information Sheet 159, on frozen funds and hardship withdrawals, updated in March 2024, defines a frozen fund as a registered scheme whose responsible entity has suspended members' rights to redeem or withdraw. It notes that a freeze can prevent assets from being sold below market value. The freeze is presented there as a protective step, not as proof of a loss.

How a withdrawal offer works

Where a scheme is not liquid, the withdrawal offer is the only door the Act leaves open for redemptions, and its shape is fixed.

On the CP 84 summary, an offer must stay open for at least 21 days, and requests are paid within 21 days after it closes. If the money made available is not enough to meet every request, the requests are met proportionally. Information Sheet 159 adds that ASIC can grant relief allowing rolling withdrawal offers, meaning periodic offers to all members when certain conditions are met.

A worked example shows the arithmetic of proportional payment. Suppose the operator of a single-house scheme makes $50,000 available under an offer, and holders lodge requests totalling $125,000. The available money is 40 per cent of what was asked for, so each request is met as to 40 per cent. A holder who asked to withdraw $5,000 receives $2,000 and keeps the rest of the holding. The figures are illustrative.

Information Sheet 159 also describes hardship relief. ASIC may allow a responsible entity of a frozen fund to pay members who meet set criteria: urgent financial hardship, unemployment of three months or more, compassionate grounds such as medical or funeral costs, or permanent incapacity. The sheet gives caps of up to $100,000 per calendar year and four hardship withdrawals per calendar year.

All of this concerns registered schemes. Whether a given arrangement is registered, and what its constitution says, are the first things the documents have to show.

The second route: selling the interest to someone else

If the scheme will not pay the holder out, the holder can look for a buyer for the interest itself. ASIC's 2012 guide marks the difference that listing makes: if a scheme is listed, an investor may be able to sell units on a public market, whereas with an unlisted scheme the investor cannot see a price and decide to buy or sell at will. The guide says nothing about how units in an unlisted scheme are sold privately, and the constitution of each scheme governs whether and how an interest can be transferred.

Where the interest is a token, what ASIC does spell out is the legal character of the place where trades happen.

What a secondary market is in law

Information Sheet 225 defines a financial market as a facility through which offers or invitations to acquire or dispose of financial products are regularly made or accepted. It adds a sentence that matters to any venue listing property tokens: one financial product trading on the venue is enough for its operator to be operating a financial market.

The consequence is a second licence, separate from the Australian financial services (AFS) licence that issuers and dealers need. According to the sheet, anyone operating a financial market in Australia must hold an Australian market licence or be exempted from that requirement, and ASIC refers operators to its Regulatory Guide 172. The sheet states that platform operators must not allow financial products to be traded on their platform without the appropriate licence, and that doing so may amount to a significant breach of the law. It also points to Information Sheet 217, which covers licensing relief for low volume financial markets.

Not every business that helps a holder sell is a market. The sheet distinguishes the operator of a venue from a market maker or broker, who makes or accepts offers on their own behalf or on behalf of one party to a transaction. That activity generally calls for an AFS licence instead. ASIC describes dealing as buying, selling and issuing a financial product, and says that arranging for another person to deal is itself a form of dealing: a business that assists people to buy or sell digital assets that are financial products may be dealing. Making a market means regularly stating prices at which one will buy or sell on one's own behalf.

Behind the trade there may be a third regulated function. The sheet describes a clearing and settlement facility as one that provides a regular mechanism for parties to transactions in financial products to meet their obligations to each other. ASIC and the Reserve Bank of Australia are co-regulators of such facilities, and Regulatory Guide 211 explains when a licence is needed.

None of this guarantees a buyer. A licensed venue is a place where an offer to sell can lawfully be made. Whether anyone accepts it, and at what price, is a separate matter that no licence addresses.

The third route: the vehicle sells the property

Most single-property arrangements are expected to end the same way: the house or unit is sold and the money is divided. ASIC's 2012 guide describes this as the ordinary source of the capital return in an unlisted property scheme, which ends when the properties are sold and the net proceeds are distributed to investors.

Who decides to sell depends on the documents. In a registered scheme the responsible entity operates the scheme, and a sale during its life is a decision for that entity within the limits of the constitution. A letter ASIC sent to the directors of responsible entities on 20 March 2020 restates the standard: responsible entities must exercise their powers and carry out their duties in the best interests of scheme members.

Members have a say at the point of ending the scheme. ASIC's page on insolvent managed investment schemes, last updated on 12 August 2026, lists the ways a registered scheme comes to be wound up: the scheme reaches the end provided for it, a court orders the winding up, the members pass an extraordinary resolution directing the responsible entity to wind the scheme up, or the responsible entity acts because the scheme's purpose has been accomplished or cannot be accomplished. Information Sheet 159 notes that members can request a members' meeting, and can apply to a court for orders to wind up a scheme or replace its responsible entity. The voting threshold for an extraordinary resolution is set by the Corporations Act and was not read for this guide, so it is not stated here.

Once the decision is made, the sale is an ordinary Queensland conveyance in which the vehicle, not the holders, is the seller.

Selling through a Queensland agent

The Queensland layer of the sale is the same one a family selling its own home meets. Under section 26 of the Property Occupations Act 2014, a real estate agent licence authorises its holder to sell real property as an agent for others for reward, along with buying, exchanging, letting and collecting rents. A person who sells the scheme's house for a fee is doing exactly that work.

The Act carves out some sellers. Section 6 exempts administrators, liquidators, receivers and trustees in bankruptcy, section 7 deals with related entities managing property within a group, and section 10 covers financial institutions and trustee companies. Whether a particular operator fits one of those provisions is a legal question about that operator. A holder of units or tokens is not the one selling in any case.

The Office of Fair Trading's guidance on appointments, last updated on 8 February 2024, says a property agent cannot provide a service for a client until appointed in writing. For a residential sale the appointment is made on Form 6, and Form 6A is used for commercial transactions. Agent and client both sign and each keeps a copy. The appointment must set out the services, any limits or conditions on them, the commission, fees and expenses, when they fall due and, for a sole or exclusive appointment, the date it ends. The Office gives 90 days as the maximum term of an appointment to sell one or two residential properties.

Here the client who signs is the registered owner: the trustee, custodian or company that holds the lot. Holders do not sign the appointment, do not set the reserve at an auction and are not parties to the contract of sale. Their influence over price and timing is whatever the constitution gives them.

How the sale money reaches holders

ASIC's insolvency page describes winding up a scheme in one sentence that also serves as the order of payment. The assets are realised, reasonable costs are deducted, including unpaid creditors, and the balance, if any, is distributed among members under the constitution and according to their respective interests.

The words "if any" carry weight. ASIC's 2012 guide warns that a scheme with debts falling due may be forced to sell assets, possibly for less than their estimated value, and that investors could lose all or part of their capital because other creditors of the scheme are repaid before them.

A worked example, with illustrative figures. A scheme holds one Toowoomba house and has 500 equal units on issue. The house sells for $900,000. A loan of $300,000 secured over the property is repaid. Selling costs, winding-up costs and unpaid creditors together come to $45,000. The balance is $900,000 less $300,000 less $45,000, which is $555,000. Divided by 500 units, that is $1,110 a unit, so a holder of ten units receives $11,100.

The example assumes every unit ranks equally. A constitution can provide otherwise, which is why ASIC's wording ties the distribution to the constitution first and to members' respective interests second.

The contrast: co-owners on a Queensland title

Two or more people who are registered as owners of a lot are in a different legal world. They hold land, not a financial product, and their exit is written into Queensland statute.

Titles Queensland's Land Title Practice Manual, in its part on transfers updated on 28 April 2026, explains how they appear on the register. Tenants in common hold stated fractions, such as one quarter and three quarters. Where a transfer to co-owners does not say how they hold, section 56(2) of the Land Title Act 1994 directs the Registrar to register them as tenants in common. A co-owner can transfer part of an interest, and the manual requires the part to be expressed as a fraction of the whole lot.

So a tenant in common has a first route that a token holder lacks: the share is itself an interest in land and can be transferred to a buyer by a registered transfer. Finding a buyer for a fraction of a house is a practical matter the manual does not address.

When co-owners cannot agree, Part 5 of the Property Law Act 2023 supplies the remedy that property lawyers have long discussed under the label of a statutory trust for sale or partition. The sections read for this guide do not use that label. Their heading is the sale and division of co-owned property, and they work as follows.

• Section 25 recognises two forms of co-ownership, joint tenancy and tenancy in common.
• Section 33 lets a co-owner apply to the court for a sale and division of the proceeds, a physical division of the property, or a combination of the two. Holders of security interests over the property are to be given notice of the application.
• Section 34 lets the court make any order the nature of the case requires.
• Section 35 makes sale the starting point. The court orders a sale unless it considers another order would be more just and fair, having regard to matters such as how the property is used and whether it can be divided.
• Sections 37 and 38 allow the court to appoint trustees, direct the terms of sale and the distribution of proceeds, and vest the property in the trustees. A security interest over the whole property stays on it. One over a co-owner's undivided share shifts to that co-owner's part of the proceeds.
• Section 39 lets the court order a sale by private treaty or by auction, allow co-owners to take part as buyers, require a market valuation, set a reserve and fix a time for completion.
• Section 40 allows orders for compensation or accounting between co-owners, taking in improvements, maintenance, damage and outgoings paid out of proportion.

The difference from a scheme is one of standing. A co-owner on title may bring the application personally. The Act's remedy belongs to co-owners of the property, and a holder of units or tokens in a vehicle is, on the structure ASIC describes in Example 9, not one of them. That holder's equivalent step is the members' meeting or the court application about the scheme that ASIC's material mentions.

A co-owner on title can ask a Queensland court to order a sale of the land. A holder of a unit or token can only ask the vehicle, its members or a court to deal with the vehicle.

Kooky, from Shaka

Kooky edits Queensland Estate and builds Shaka, the payment router he made for Queensland property professionals. One payment comes in, and every agent, agency and party in the deal receives their signed share on closing date.

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