Amendments to the Conveyancing Act 1919 were passed by the NSW Parliament on 13 November 2018 that impose further obligations on developers.
The changes affect disclosure, the statutory cooling-off period and rescission of the contract, amongst other things.
It will be an offence to offer residential property for sale (that is yet to be created under a plan of subdivision) unless there is a disclosure statement in the prescribed form and it is made available to prospective purchasers for inspection in the same way the draft contract for sale is made available to prospective purchaser for inspection.
The disclosure statement must include a copy of the draft plan, prepared by a registered surveyor and contain information and documents prescribed by the regulations.
Cooling off period
The cooling-off period for off the plan purchases is extended to 10 business days in lieu of 5 business days.
Purchasers will no longer be required to complete the purchase earlier than 21 days after receiving copies of the registered plan and other documents that were registered with the plan (including but not limited to the by-laws for the scheme, if applicable).
If the vendor becomes aware that the disclosure statement was inaccurate in relation to a “material particular” at the time the contract was signed or has become inaccurate in relation to a “material particular” after the contract was signed, the vendor must serve a notice of changes on the purchaser at least 21 days before completion. The purchaser may elect to rescind the contract, after receiving a notice of changes, if the purchaser would not have entered into the contract had the purchaser been aware of the changes and would be materially prejudiced by the changes.
The vendor can no longer prescribe what is a “material particular” in the contract and the circumstances in which the purchaser can rescind.
The new legislation defines a “material particular” to include a change to the draft plan, provision of draft by-laws, an easement or covenant or changes to the schedule of finishes that will, or is likely to, adversely affect the use or enjoyment of the lot. The purchaser may even rescind after service of the registered plan and other documents (in the absence of the vendor serving the purchaser with a notice of changes) if the disclosure statement includes any inaccuracy in relation to a material particular that is such that the purchaser would not have entered into the contract had the purchaser been aware of the change and would be materially prejudiced by the change.
You’ll find that the team at Conditsis Lawyers is here to demystify the conveyancing process.