An “Off the Plan” contract is defined to mean a contract for the sale of a residential lot that has not been created at the time the contract is entered into.
The new laws put extra disclosure obligations on vendors so that purchasers have greater transparency, new remedies and stronger protections when they buy property “Off the Plan”. The amendments provide purchasers with remedies where disclosures are found to be inaccurate or different to the final registered documentation of the plan. The requirements will apply pursuant to the Conveyancing Legislation (Amendment) Act 2018 and Conveyancing (Sale of Land) Amendment Regulation 2019.
The key amendments are summarised below:
Section 60ZM
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 that outlines key information, like sunset dates and other conditional event. 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.
Section 60ZN
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.
Section 66ZP
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.
Section 60ZL
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.
Section 60ZM
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.
Section 66S
The applicable cooling off period for residential off the plan contracts has been increased from 5 days to 10 days.
Section 66ZS
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.
Section 66ZT
This section provides that any money paid by the purchaser by way of deposit or instalment must be held as trust money.
Contact Rostom Manookian on 0416 716 960 or email: rostom@manookiansolicitors.com, if you have any questions on “Off the Plan” sale or purchase of residential property. At Manookian Solicitors we will ensure that you get the right advice! We offer fixed fee conveyancing services that will give you certainty and clarity and ensure that there will not be any hidden costs or surprises.
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