The Conveyancing (Legislation) Amendment Act 2018 (Act) was passed by Parliament on 13 November 2018. It deals with aspects of electronic land transactions and off-the-plan sale contracts for residential property.
The sections of the Act dealing with electronic land transactions took effect on assent being 22 November 2018. The sections introduced to provide greater protections to purchasers under off-the-plan sale contracts for residential property are to take effect on proclamation which has not yet occurred.
When given effect, the new requirements will include:
- Sellers will be required, before the contract is signed, to disclose crucial information about the development (including sunset dates) in a mandatory disclosure statement, and attach key documents to be prescribed by regulations, including:
- a copy of the proposed plan as well as details of easements and covenants
- for strata and community properties, proposed by-laws
- a schedule of finishes where building work is required as part of the contract.
- Developers will have to notify purchasers of changes to a ‘material particular’ during the development. These are changes that will adversely affect the use or enjoyment of the lot being sold. Examples may include changes to the size of the lot or the internal configuration of a strata unit.
- If a purchaser is materially prejudiced by a change to a material particular, and would not have entered the contract had they known about the change, they will be able to rescind the contract. The Act also permits regulations to prescribe a mechanism for materially prejudiced purchasers to claim compensation (but remain in the contract).
- In 2015, legislation was introduced to restrict the exercise of rights of rescission by a developer relying on ‘sunset clauses’, being effectively a failure to achieve registration of the plan or similar. The Act expands the events captured by the restrictions, including for example, a sunset date based on a failure to achieve an occupation certificate. In addition, the Court will be entitled to award damages to a purchaser if rescission is permitted.
- The cooling off period will increase from 5 business days to 10 business days.
For more information, contact:
Mike Ellis
Partner – Property
T +61 2 9261 5900
E mike.ellis@vincentyoung.com.