Changes to Conveyancing Laws – Off-the-plan and electronic contracts

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Parliament has approved new laws that will bring stronger protections for purchasers who buy property off-the-plan and, separately, provide greater flexibility to parties using electronic land contracts and deeds.

The Conveyancing (Legislation) Amendment Act 2018 was passed by Parliament on 13 November 2018. The new laws follow an extensive review by the Office of the Registrar General, including the publication of two discussion papers in late 2017, ‘Off-the-plan contracts for residential property’ and ‘Removing barriers to electronic land transactions’.

The full text of the Bill as presented to Parliament is available on the official NSW legislation website at

For more information please contact the Office of the Registrar General on

Off-the-plan contracts

The legislation gives off-the-plan purchasers greater certainty about what they are buying and builds on safeguards introduced by the Government in 2015, in response to community concerns.

An off-the-plan contract is used to sell a parcel of land or strata unit that does not exist at the time contracts are signed. These are a popular way for buyers to enter into the property market, as buyers can commit to purchasing a property that will not be settled for some time. A deposit (often 5 or 10% of the price) is paid on exchange of contracts, with the construction and settlement period (often several years) allowing buyers time to save additional funds required for settlement.

Off-the-plan buyers have been particularly vulnerable to the actions of developers, being generally unable to inspect the property before purchase.  The new laws address this vulnerability by creating a more transparent process, setting minimum standards of disclosure and providing statutory remedies where the final property differs from what was promised.

Key changes introduced by the new laws are:

A new mandatory disclosure regime for off-the-plan contracts

Before the contract is signed, vendors will be required to disclose crucial information about the development (including sunset dates) in a mandatory disclosure statement, and attach key documents to be prescribed by regulations, including:

  • A copy of the proposed plan as well as details of easements and covenants
  • For strata and community properties, proposed by-laws
  • A schedule of finishes where building work is required as part of the contract.
Notification of changes

Developers will have to notify purchasers of changes to a ‘material particular’ during the development. These are changes that will adversely affect the use or enjoyment of the lot being sold. Examples may include changes to the size of the lot or the internal configuration of a strata unit.

Statutory remedies where purchasers are materially prejudiced by changes

If a purchaser is materially prejudiced by a change to a material particular, and would not have entered the contract had they known about the change, they will be able to rescind the contract. The Act also permits regulations to prescribe a mechanism for materially prejudiced purchasers to claim compensation (but remain in the contract). Regulations are being developed to support this provision and will be made available for public consultation in early 2019.

Registered documents to be given to purchasers before settlement

Developers will need to provide the purchaser with a copy of the final, registered plan at least 21 days before settlement.

Sunset clauses

Sunset clauses are contractual terms that allow either party to terminate an off-the-plan contract should a certain event, like the registration of the plan, not occur by a specified date. In 2015, the Government introduced laws preventing developers from using sunset clauses to end contracts without an order from the Supreme Court (unless the purchaser agrees). The new legislation builds on this protection by extending its application to capture other events that trigger termination of the contract, like the issue of an occupation certificate. The legislation also confirms that the Court can award damages if rescission is permitted.

Cooling off period and deposits

The cooling off period for off-the-plan contracts is extended to 10 business days (from 5 business days for contracts relating to already constructed residential property). Deposits must be held in a controlled money or trust account.

The off-the-plan provisions are not yet in force and will commence on a date to be proclaimed. 

Regulations to support the implementation of the new laws are being developed and a Regulatory Impact Statement will be released by the Office of the Registrar General for public consultation towards the end of 2018 and into the new year.

Electronic land transactions

As well as providing much needed protections for off-the-plan purchasers, the legislation also removes obstacles that have prevented a fully electronic conveyancing process, from contract through to settlement.

New provisions modernise and give flexibility to conveyancing transactions by confirming that land contracts, registry instruments and deeds can be formed electronically.  People will still be able to sign paper contracts with wet-ink signatures if they choose, but the legislation introduces a more effective alternative for those wishing to transact electronically.

Key changes include:

Electronic sale of land contracts and digital disclosure

The Conveyancing Act 1919 has been amended toconfirm that land contracts can be formed electronically and that traditional requirements for land contracts to be in writing can be satisfied electronically.  If a sale of land contract is in electronic form, then those documents which must be attached to the contract to satisfy vendor disclosure obligations may also be in electronic form.

Deeds can be made electronically

New provisions confirm that deeds can be signed and witnessed electronically, removing traditional restrictions on the type of substance on which deeds may be written (historically, deeds had to be formed on paper or parchment). This change will apply to all deeds, not only those relating to land. Electronic signing of deeds will be an option but not a requirement.

Land registry instruments and supporting documents  

Where a registry instrument (like a mortgage) is lodged for registration, any other document supporting that instrument may be signed electronically. For mortgages in particular, amendments clarify that a mortgage is acceptable for registration in NSW where signed by the mortgagee alone (that is, not also signed by the borrower and witnessed), provided that the mortgagee certifies that it holds a mortgage granted by the mortgagor on the same terms as that which is lodged for registration.

Electronic services of notices

Section 170 of the Conveyancing Act which provides for methods by which notices under the Act may be served has been expanded to permit service by email to an address specified by the person to be served for the service of notices of that kind.