The provisions of the Conveyancing Legislation (Amendment) Act 2018 (NSW) commenced on December 1 2019. In brief, the amendments introduce vendor disclosure obligations in relation to off the plan contracts for residential properties. Simultaneously, the amendments provide purchasers with remedies where disclosures are found to be inaccurate or different to the final registered documentation of the plan.The key amendments are summarised below:
This section provides that, prior to the signing of a contract, a vendor must disclose certain information about the development. This disclosure statement must be attached to the contract. The plan must show:
- The lot number, location and area of the lot;
- A draft floor plan and draft location plan for lots in a proposed strata scheme;
- The site(s) of any proposed easement or covenant affecting the lot.
- Additional obligations prescribed by the Regulations.
The vendor must notify of any material particular changes to the plan at least 21 days prior to completion. If a material particular change is made, the vendor must correct the disclosure statement with respect to any inaccuracies by giving the purchaser a notice. The purchaser will retain a right to rescind the contract if they would not have signed the contract had they known about the material change.
Prior to completion, the vendor must provide the purchaser with the registered plan and
all documents registered with the plan. The purchaser cannot be contractually obliged to complete the contract until at least 21 days after the serving of the registered plan and its associated documents. If, after the service of these documents, the purchaser can prove they would never have signed the contract if they had been aware of any inaccuracy that would materially prejudice them, they may rescind the contract.
This section defines what a ‘material particular’ in fact is. A material particular includes certain changes that affect the use and enjoyment of the subject lot, including but not limited to:
- Changes to the draft plan;
- Changes to bylaw schedule of finishes or easements that adversely affect the use and enjoyment of the land; and
- Any other matters which might be prescribed by regulation.
This section permits the purchaser to seek an alternative to rescission. The purchaser is entitled to seek compensation for up to 2% of the contract price for a change regarding a material particular. This compensation is to be pursued through arbitration if the claim is made after completion.
The applicable cooling off period for residential off the plan contracts has been increased from 5 days to 10 days.
This provision allows a vendor to rescind an off the plan contract under a sunset clause only if:
- Each purchaser consents to the rescission in writing; or
- The vendor obtains an order from the Supreme Court granting a right to rescind; or
- The regulations otherwise permit rescission.
This section provides that any money paid by the purchaser by way of deposit or instalment must be held as trust money.
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