The Conveyancing Legislation Amendment Bill 2018 was recently introduced into the NSW parliament and proposes changes to the Conveyancing Act 1919 and Real Property Act 1900, particularly in relation to off-the-plan sales contracts.
The key change will see greater disclosure obligations on vendor’s and their off-the-plan contracts with a focus on providing greater protections for purchasers.
Other minor amendments to be made will continue the NSW government’s push towards a “paperless” and electronic conveyancing system.
Some of the changes worth noting are:-
- A disclosure statement will need to be attached to contracts for the sale and purchase of land before contracts are exchanged.
- The disclosure statement will be required to contain a copy of the draft strata plan and other documents including a schedule of finishes.
- The purchaser will have rights to rescind the contract in certain circumstances where there is defective or inaccurate disclosure.
- A failure to attach the disclosure statement will be an offence and the purchaser will have contractual remedies to rescind the contract.
- If there are any changes to the disclosure statement after the contract is exchanged but before settlement, the vendor must disclose those changes and if the purchaser is materially impacted, they can terminate the contract.
- The vendor must serve on the purchase a copy of the registered plan and other documents and settlement will be no earlier than 21 days after the purchaser receives those documents.
- The cooling off period for an off-the-plan contract will be extended from 5 business days to 10 business days. There will also be restrictions as to how much this period can be shortened.
- Deposits for off-the-plan contracts will need to be held in a trust account and may be invested but cannot be released to the vendor prior to settlement.
The above changes are very similar to the existing regime in Queensland but with subtle differences (as is always the case).
Other minor changes will assist with the electronic conveyancing system and provide for documents to be electronically signed.
Compliance with these changes will be particularly important as a failure to comply may give the purchaser an ability to terminate the contract prior to completion.