By Russell Cocks, Solicitor
First published in the Law Institute Journal
The 2008 Contract of Sale of Real Estate was amended in 2012, principally in response to the Personal Property Securities Act 2009 (Cth) (the Act). As an indication of the complexity of the Act, it has been decided to make further amendments to the standard contract that again largely address the requirements of the Act, although the opportunity has been taken to make some amendments that can largely be described as housekeeping.
Rather than going through the process of arranging for a new contract to be adopted by regulations, these amendments have been achieved by adding a set of special conditions to be made available to all users of the standard contract. The contract has always accepted that changes can be made by special condition and the new format merely means that all standard contracts will have both general conditions and special conditions. Further special conditions can be added to these standard special conditions (numbered 1-5) as required. The changes may be summarised as follows.
Special condition 1
Replaces general condition 7 with a new general condition 7 that amends the requirements associated with the Act in the light of experience gained from dealing with the Act in recent years.
General condition 7 remains unwieldy, but that is really a function of the Act as this general condition attempts to fully deal with issues arising from personal property registration. It must be noted that this general condition is not applicable to the great majority of real estate contracts, as such contracts rarely include the transfer of personal property that is subject to the Act. Nevertheless, the general condition is available for those transactions that do trigger the operation of the Act.
Special condition 2.1
Replaces general condition 13.1(b)
AND
Special condition 2.2
Replaces general condition 13.4
These two changes relate to the GST farming business exemption. Neither change is intended to change the substance of the general condition and merely reflects some expert feedback that has been received in relation to the general condition.
Special condition 3.1
Replaces general condition 17.1
AND
Special condition 3.2
Replaces general condition 17.2
These two changes allow for email service and provide that email service is effected when the email is received.
Special condition 4
Replaces General Condition 18
This change corrects reference to the role of the nominee from ‘purchaser’ to ‘transferee’.
A nomination does not substitute the nominee as a ‘purchaser’ but rather allows the nominee to be an additional or replacement ‘transferee’.
Special condition 5
Adds general condition 12.4 in relation to stakeholding
Section 27(7) Sale of Land Act provides that, if a purchaser fails to respond to a request for release of deposit within 28 days, the purchaser will be deemed to be satisfied with the particulars and deemed to have given consent. This amendment deems the purchaser to have also accepted title in such cases.
Tip Box
Whilst written for Victoria this article has interest and relevance for practitioners in all states.