Significant changes to off the plan contracts commenced 1 December 2019.
The changes arise from the Conveyancing Legislation Amendment Act 2018 (NSW) and the Conveyancing (Sale of Land) Amendment Regulation 2019 (NSW). They place further disclosure obligations on vendors. They also create new remedies and stronger protections for purchasers when entering into residential off the plan contracts.
Changes to off the plan contracts – summary:
- Certain prescribed documents must be attached to residential off the plan contracts. These include a prescribed Disclosure Statement, a draft plan prepared by a registered surveyor and other draft documents, as set out in clause 4A of the Conveyancing (Sale of Land) Regulation 2017.
- A purchaser can rescind the contract within 14 days if the Disclosure Statement, draft plan or relevant prescribed documents are not attached to off the plan contracts exchanged on or after 1 December 2019.
- There is an ongoing obligation on the vendor to notify purchasers of changes to material particulars using the prescribed Notice of Changes form. Purchasers may be able to rescind or claim compensation if there is a change to a material particular.
- The cooling-off period for residential off the plan contracts is extended to 10 business days.
- The final registered plan must be provided to the purchaser at least 21 days before settlement.
- Deposits must be retained by the stakeholder in a trust or controlled monies account.
An off the plan contract is defined in the amending act to mean a contract for the sale of a residential lot that does not exist at the time the contract is entered into.
The following are not caught by the amendments:
- The sale of a commercial property off the plan.
- The sale of a residential lot off the plan if it is sold at the point when the title is registered but an occupation certificate has not been issued.
- Contracts arising out of the exercise of an option that was entered into before 1 December 2019.
Updates to By Lawyers publications
- The By Lawyers Conveyancing Publication, including Sale and Purchase Guides and 1001 Conveyancing Answers, all contain dedicated commentary regarding off the plan contracts. These commentaries now cover the new requirements in detail.
- The By Lawyers Contract for Sale of Land has been amended as follows:
- Statutory cooling off notice – 10 business days;
- Statutory attachments table includes Disclosure Statement;
- Price and deposit clause addresses the requirement for deposit and instalment payments to be held as trust or controlled money;
- New clause 16(d) ‘Residential off the plan contracts’; and
- Off the plan settlement changed to 21 days after notice of registration of plan.
- All precedents making reference to cooling off periods have been updated to accord with the new period.
- Disclosure Statement and Notice of Changes forms are available on the Sale matter plan.
- New notices for rescission and compensation claims have been added to the ‘Claims, disputes and notices’ folder. Precedent letters serving these notices on the relevant parties have also been added.
By Lawyers are proud to assist subscribers to understand and comply with these amendments. Like all By Lawyers publications, our Conveyancing Guides provide all the necessary commentary and precedents in one place. Enjoy practice more!