Australia: New off the plan requirements commence 1 December 2019

In brief - the government has proclaimed 1 December 2019 as the day on which the Conveyancing (Sale of Land) Regulations 2019 (NSW) will commence

Disclosure statements must be attached to every off the plan contract

An "off the plan contract" is a contract for the sale of a residential lot that has not been "created" at the time that the contract is entered into. A lot is created when the plan for creating a lot becomes a registered plan.

Generally, the following must be attached to the disclosure statement:

  • the draft plan showing the lot number, location and area of the property
  • the draft floor plan and draft location plan for the property
  • the site of any proposed easement, profit à prendre, restriction on the use of land or positive covenant and the proposed terms (ie draft section 88B instrument)
  • any proposed bylaws, development contract and management statement. It also includes a reference to a strata development contract
  • the schedule of finishes.

A change to any of the above is treated as a change of a "material particular". However, there are some exceptions. The following are not considered to be a change of a "material particular":

  • a change to a lot number
  • a change in the street name
  • a change to, or the inclusion of a provision for the allocation of the costs of shared expenses under a management statement, subject to ensuring "the fair allocation of the costs of shared expenses relating to parts of the building"
  • a change to the location of a strata parking or storage area, but only if the change is made in accordance with the terms of the contract.

If there is a change to a "material particular", a "notice of changes" must be served at least 21 days before completion.

In relation to all plans, "substantial compliance" with the titles office lodgement rules is required.

A document included in the contract is taken to be included in the disclosure statement if it is attached to the contract.

Failure to comply may give a purchaser rescission rights

It is important to fully comply with the above requirements. If you do not, or if you comply and subsequently make changes to any "material particular", a purchaser may rescind and seek compensation if the purchaser:

  • would not have entered into the contract if the purchaser was aware of the inaccuracy; and
  • would be materially prejudiced by the inaccuracy all.

Statutory cooling off period is now 10 business days

The contract must also include a new warning statement as the statutory cooling off period applicable to residential property is being extended from 5 business days to 10 business days.

Updated warning statements are required. If not, purchasers may have a right to rescind the contract.

Deposits and instalments must be held in trust or controlled monies accounts

It is now a mandatory requirement that deposits or instalments to the purchase price must be held in a trust or controlled monies accounts and may be invested in accordance with the terms of the contract.

There is no requirement as to the amount that must be paid as a deposit or instalment.

New implied terms introduced to off the plan contracts

New implied terms have been introduced:

  • a purchaser that has a right to rescind on an off the plan contract, may instead of rescinding, issue a "claim notice" and claim compensation of up to 2% of the purchase price of the property. An arbitrator may also award the purchaser costs
  • the claim must be made within 14 days of the purchaser becoming aware of the relevant matter, which normally occurs by you issuing a "notice of changes", or upon receipt of all registered documents. It will otherwise lapse 14 days after completion
  • there is a new requirement that all registered documents must be served on the purchaser at least 21 days before the due date for completion

If a "claim notice" is served by a purchaser under the regulation, it must be determined by an arbitrator if unable to be resolved by agreement.

If the parties are unable to agree on who will be the arbitrator within the earlier of two months after receipt of a "claim notice", or one month after completion, the NSW Department of Customer Service will select one.

The claim amount plus any further interest earned on it is held by the deposit holder until the claim is determined or withdrawn. A claim is withdrawn if it is not determined within the earlier of four months of service of the claim notice three months after completion.

Rescission under sunset clauses (proposed amendments not yet Regulation)

The vendor may rescind an off the plan contract under a sunset clause if the residential lot is not created by the sunset date but only if:

  • each purchaser consents in writing;
  • an order is obtained from the Supreme Court; or
  • the regulations permit it.

The vendor must serve notice at least 28 days before the proposed rescission that specifies why the vendor is proposing to rescind and the reason for the delay in creating the residential lot.

At 25 October 2019, the proposed regulation to broaden the scope of these provisions to cover an occupation certificate had not yet been proclaimed. We will continue to monitor the regulation and issue a further update in the event there are any changes to the above information.

The advantage of Electronic Contract Exchange Systems

Compulsory disclosure statements will apply from 1 December 2019.

If you are using an electronic contract exchange system, disclosure statements can easily and instantly be added to any existing off the plan contract.

Brendan Maier
Property development
Colin Biggers & Paisley

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions