This article about the new disclosure requirements for off-the-plan apartment sales in NSW has been provided by Emma Smythies, Bugden Allen Graham Lawyers.
New legislative reforms for off-the-plan contracts for sale in NSW came into effect from 1 December 2019. The reforms in the Conveyancing Legislation Amendment Act 2018 and Conveyancing (Sale of Land) Amendment Regulation 2019 are intended to provide purchasers with greater transparency and stronger protections when they buy property off-the-plan.
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Developers should ensure they are now issuing compliant off-the-plan contracts.
Disclosure Statement
A key change will be the requirement for vendors to attach a disclosure statement to the contract. The disclosure statement is in an approved form and summarises the key information such as the title structure, completion date and sunset dates.
Prescribed documents must be attached to the disclosure statement. The prescribed documents include the draft plan, s88B instrument, schedule of finishes, by-laws and any management statement.
Failure to attach a disclosure statement entitles the purchaser to rescind the contract within 14 days of the contract date.
Notice of Changes, Rescission and Compensation Rights
In some circumstances, purchasers will be able to rescind the contract because of a change to a ‘material particular’. This relief will only be available to purchasers who can show that they would not have entered into the contract had they been aware of the change and that they are materially prejudiced by the change.
If the purchaser has a right to rescind, the purchaser may instead claim compensation (capped at 2% of the purchase price).
Cooling Off Period
The cooling off period for off-the-plan contracts will be extended from 5 business days to 10 business days. The cooling off period remains 5 business days for all other residential contracts.
Copy of Registered Plan to be Provided 21 Days Before Settlement
Developers should be aware that they will need to provide purchasers with a copy of the final registered plan, and any associated documents, at least 21 days before settlement. Developers will be unable to compel a purchaser to settle until 21 days after the registered documents have been provided.
Contract for Sale and Purchase of Land 2019 Edition
The NSW Law Society has also now released the new Contract for Sale and Purchase of Land 2019 Edition.
If you would like to know more about these changes and how they may affect your development, please contact one of our team.
Emma Smythies Bugden Allen Graham Lawyers E: emma@bagl.com.au P: 0412 046 966
This post appears in Strata News #309.
Have a question about the changes to the NSW off the plan sales requirements or something to add to the article? Leave a comment below.
EmbedThis article does not constitute legal or other advice and should not be relied upon this way. Readers should take legal or other advice before applying the information containing in this publication.
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