Consequences of the deregulated Contract of Sale of Land
What were the regulations?
The Estate Agents (Contracts) Regulations 2008 (‘regulations’) reached their sunset date on 11 August 2018. Consequently, those regulations and the amending regulations in 2011 and 2014, are revoked. The regulations bound estate agents, but not legal practitioners and conveyancers.
Legal practitioners and conveyancers may prepare contracts of sale of land in any form, and such contracts, provided they satisfy formal requirements, will be enforceable. The regulations on the other hand required estate agents to prepare contracts in the ‘prescribed form’, unless an agent used a form of contract prepared by a legal practitioner or conveyancer.
What does the deregulation mean?
The revocation of the regulations notionally means that the minority of estate agents who chose to prepare contracts are left with no prescribed form of contract. However, s 53A of the Estate Agents Act 1980 authorises agents to use contracts that are approved by a professional association, within the meaning of the then applicable Legal Profession Act 2004. The prescribed contract was approved by the Law Institute of Victoria (LIV) and the revocation of the regulation does not affect that approval. The current version of the LIV contract includes a warranty in GC 2.1 that the general conditions of the contract are identical with the general conditions prescribed in the regulations. That warranty would appear to be unaffected by the revocation of the regulations. Thus, we can expect that the prescribed contract will continue in general use into the near future.
What are the alternatives to the prescribed contract?
Whether the deregulation of the contract will result in other forms of contract becoming common is yet to be seen. It would be fair to say that special conditions created to accommodate recent changes, including CGT & GST withholding, have resulted in the LIV contract becoming unwieldy and the use of alternative contracts increasing.
The By Lawyers contract is ready and waiting
The By Lawyers Contract of Sale of Land for Victoria was introduced on 1 March 2018 and its use has been increasing steadily among Victorian legal practitioners and conveyancers. The By Lawyers contract covers CGT & GST withholding in simple terms, without the need for Special Conditions, and has a number of other advances over the LIV contract which further simplify the conveyancing process.
Some of the compelling reasons to use the By Lawyers contract include:
- it is co-authored by Russell Cocks, who has brought to the task 40 years of hands-on Victorian conveyancing experience and Guy Dawson of By Lawyers, arguably the most widely read legal author in Australia today; and,
- the By Lawyers legal and editorial teams ensure the By Lawyers contract is always up to date with any changes in the law or practice.
For further information you can read the related post Seven reasons to use the By Lawyers contract.
The By Lawyers Contract of sale of Land is available to LEAP users and can also be accessed through the By Lawyers website by subscribing to the Conveyancing Guide.