New consumer guarantees take effect from 1 January 2011
as part of the new Australian Consumer Law reforms.
The guarantees replace the existing regime of implied conditions
and warranties under the Trade Practices Act 1974 (Cth) and the
various state and territory fair trading legislation with a
consistent national scheme. The Trade Practices Act will be renamed
the Competition and Consumer Act 2010 (Cth)
False and Misleading Representations in Relation to Land
The provisions in the Trade Practices Act about false and
misleading representations in relation to land have been reproduced
in a simulation in the new legislation. But a new provision has
been added prohibiting false and misleading representations about
offers, gifts or other free items in connection with sales of land.
It extends to 'rebates', which includes 'cash-back
offers'. While these offers can still be conditional upon
certain obligations being fulflled by a consumer, once they are
fulflled the new provision applies so the 'cash- back' must
be provided within the time specifed, or if no time is specifed,
within a reasonable time.
The new law also introduces an infringement notice system by
which the ACCC can issue notices to persons who breach the law
instead of bringing a criminal prosecution.
Further impact of Australian Consumer Law on the REIQ
Residential Land and Building Contract from 1 July 2010.
Pest and Building Inspection
The pest and building inspection clause was considered unfair as
only the buyer had a right to terminate for a unsatisfactory
building and pest report. If no response was received from the
buyer at all, there was automatic satisfaction with pest and
building condition. Under the version 7 of the contract, both
parties have termination rights and the automatic satisfaction of
the clause is removed.
Now, the buyer must tell the seller by 5pm on the inspection
date whether it terminates due to unsatisfactory reports, or
confrms satisfaction with the reports, or waives the beneft. If the
seller does not receive any of the above notices from the buyer,
the seller has a right to terminate. If the seller has not
terminated, the buyer can give notice of satisfaction or waiver
after the inspection date. Once the buyer waives the beneft of the
conditions, the seller's termination right under this clause
ends. On termination under this clause by either party, the deposit
is returned to the buyer.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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