Legislation has been introduced to the Western Australian
Parliament to amend the Sale of Land Act 1970.
The principal amendments are to Part III of the Act which is
headed "Restrictions on sale of subdivisional land".
Section 13 of the Act currently provides that a person shall not
sell five or more lots in a subdivision or two or more lots in a
strata subdivision unless that person is the registered proprietor
thereof or is presently entitled to become the proprietor. The
Section says a person is not entitled to become the proprietor of a
lot unless he is entitled to be registered as proprietor under one
or more registrable instruments or applications lodged at
There is a view that the current Section has produced some
unintended and unfair outcomes.
The Bill contains a new definition of "future lot
contract" to mean an executory contract for the sale and
purchase of one or more lots to be created by subdivision where the
vendor is a person:
who is not the proprietor of the lot or lots to which the
contract relates; but
who will become, or will be entitled to become, the proprietor
of that lot or those lots.
Section 13 will now be amended to prohibit the sale of one or
more lots in a subdivision, or strata subdivision unless the person
is the registered proprietor or is presently entitled to be
An exclusion to Section 13 is contained within new Sections 13A
to 13D. The exclusion allows a person to sell a lot under a future
lot contract if certain requirements are met. The future lot
contract must now contain a condition ("vendor's
condition") that before the end of the specified period, the
vendor will become, or will be entitled to become, the registered
proprietor of the lot or lots to which the contract relates.
The specified period is six months from the date of the contract
or any other period which is specified in the contract.
A future lot contract must contain a warning that includes a
statement to the effect that the vendor is not the proprietor of
the lot or lots to which the contract relates. Without such a
warning a future lot contract is illegal and void.
All deposits paid under a future lot contract must be paid to an
approved deposit holder within two working days. Lawyers, real
estate agents and settlement agents are approved deposit holders. A
future lot contract which does not contain this provision is
illegal and void.
Section 13G will include a requirement that the vendor must make
all reasonable endeavours before the expiration of the period to
obtain the necessary regulatory approvals for the subdivision and
create and lodge the necessary plans for subdivision.
Section 13H will provide that when the vendor's condition
has been satisfied the vendor must give the purchaser notice in
writing. The notice must be given within ten working days after the
date on which the condition is satisfied. If the vendor fails to
give the notice then the condition is deemed not to have been
satisfied and the purchaser will be entitled to terminate the
The amendments will only apply to future lot contracts that are
entered into after the commencement date of the amendment.
In addition to these changes all of the penalties specified in
the Act have been increased to $100,000.
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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