There were almost 30,000 off-the-plan sales in the last financial year accounting for about 12 per cent of all residential property sales in NSW.
Off-the-plan buyers get in early to secure their property purchase by entering into a contract and paying a deposit to the developer. These early sales are often critical to a developer obtaining the finance necessary for the project to proceed.
The Conveyancing Legislation Amendment Bill 2018 was passed on 13 November 2018 to amend the Conveyancing Act 1919 (NSW). The changes to the legislation affect disclosures, cooling off periods, the holding of deposits and sunset clauses.
The changes include:
- buyers must be provided with a copy of the proposed plan, prepared by a registered surveyor including all information that is to be prescribed by the regulations;
- vendors must provide a copy of the final plan (and notice of changes) at least 21 days before the buyer can be compelled to settle;
- allowing buyers to terminate the contract or claim compensation if they are materially impacted by changes made from what was disclosed;
- widening existing legislation to clarify that the Supreme Court can award damages where the vendor terminates under a sunset clause; and
- extending the cooling off period to 10 business days with any deposit to be held in a controlled account.
The effect on the new legislation is to impose more stringent conditions for developers when selling off-the-plan. It is intended to provide a greater safety net and certainty for buyers.
If you require assistance with your off-the-plan sales and compliance, contact our experienced lawyers.