Further to our eAlert! regarding the changes to notice requirements for all off-the-plan contracts, new legislation has been proposed that may assist property developments and agents.

You will recall that the notices required by the Consumer Affairs Legislation Amendment (Reform) Act 2010 (Vic) (Warnings) to be included on the front page of a contract of sale are:

  • the purchaser may negotiate with the vendor about the amount of deposit moneys payable under the contract (subject to the limit set by section 9AA(1)(b) of the Sale of Land Act 1962 (Vic))
  • a substantial period of time may elapse between the day on which the purchaser signs the contract of sale and the day on which the purchaser becomes the registered proprietor of the lot
  • the value for the lot may change between the day on which the purchaser signs the contract of sale and the day on which the purchaser becomes the registered proprietor.

If the Residential Tenancies and Other Consumer Acts Amendment Bill 2012 (Vic) (Bill) is passed, developers will not have to put the Warnings on the very front page of contracts, but instead in a "conspicuous" place in the contracts. As such, if the Bill is passed, developers will be able to keep marketing materials on the front page and include the Warnings elsewhere in the contract.

Further, the Bill proposes to ensure that a purchaser's right to rescind a contract does not extend to circumstances in which a vendor fails to include the Warnings. However a vendor is subject to a penalty of A$1,408.40 for every contravention of the Sale of Land Act.

If passed, these amendments would be a positive change for developers and agents in relation to off-the-plan contracts of sale.

We understand that some of our clients have already begun to place the Warnings on the front page of their contracts. However, if the Bill is passed you will only need to put the Warnings in a "conspicuous" place, such as the signature page or with the cooling off notices. Until 1 December 2012, there is no need to include the Warnings in your contracts at all. We will monitor this Bill and inform you of your requirements in relation to the Warnings via future eAlerts

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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