Question: What Are the New Legalities Surrounding off the Plan Sales?
Amendments have been made to the legislation and regulations which govern conveyancing in New South Wales effective 1 December 2019 which concern off the plan sales. These new laws have placed additional disclosure obligations on the vendors so that purchasers can enjoy greater transparency in relation to the dealings with additional levels of protection from breaches which otherwise could occur as well as additional remedies in the event of a breach.
The changes require additional prescribed documents to be attached to any off the plan contract which will include:
- A completed disclosure statement by the vendor;
- A draft plan to be prepared by a registered surveyor; and
- Any other relevant documents as set out in the new regulation.
The changes provide that a purchaser can rescind an off the plan contract within 14 days of exchange if the disclosure statement, draft plan or relevant prescribed documents are not attached to the off the plan contract if same is exchanged on or after 1 December 2019.
Additional changes worthy of noting are as follows:
- There is an ongoing obligation on the part of the vendor to notify the purchaser of any changes to any of the material particulars concerning the sale. Material particulars would include:
- the draft plan
- the schedule finishes
- easements or covenants
- a strata management statement or building management statement
- a management statement for a community, precinct or neighbourhood scheme
- a development contract or strata development contract
- Purchasers may be able to rescind or seek compensation if there is a change to a material particular.
- The cooling-off period for off the plan contracts is extended to 10 business days.
- The final registered plan must be provided to the purchaser at least 21 days prior to settlement.
- Deposits paid upon exchange of contracts must be retained by the stakeholder in a trust or controlled monies account.
- There are stronger sunset clause protections in that the new laws now extend the definition of sunset clause to capture other events which trigger termination of the contract, such as the issuing of an occupation certificate.
The new disclosure regime and statutory remedies referred to above will apply to residential off the plan contracts entered into as from 1 December 2019. They do not apply to contracts that arise from option deeds that were exchanged prior to the commencement of the changes. on 1 December.
However, the new sunset clause provisions will apply to all off the plan contracts, irrespective of whether they were signed before or after the commencement of the changes on 1 December.
The changes to the prescribed form of the cooling off period warning notice will affect all contracts for the sale of residential property, not only off the plan contracts, from 1 December 2019.
Brydens Lawyers has available for your assistance an expert conveyancing team headed by our Associate and Licensed Conveyancer, Celeste Revell. The purchase of a home either outright or off the plan may represent the most important purchase of your life. Let the experts at Brydens Lawyers help guide you through the process every step of the way. Contact Brydens Lawyers for all your residential conveyancing requirements.