New laws to strengthen protections for off-the-plan purchasers and remove barriers to electronic contracts
New laws to be introduced into Parliament later this year will bring stronger protections for off-the-plan purchasers, and will clarify the role of electronic contracts in land transactions
The changes follow extensive consultation after the release of two discussion papers in December 2017, “Off-the-plan contracts for residential property” and Removing barriers to electronic land contracts
- Key aspects of the reform include:
- A vendor disclosure regime that requires all developers who sell off-the-plan to give more detail about what the purchaser is buying. Developers will need to provide a Disclosure Statement as part of the contract that attaches:
- A copy of the proposed plan including 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.
- The developer will have to notify purchasers of any changes made during the development. If a purchaser is materially impacted by the change, they will be able to rescind the contract. As an alternative to ending the contract, the purchaser will have a limited right to claim compensation if they are materially impacted by a change to what was disclosed.
- Existing sunset clause protections will be strengthened through widening of the definition of ‘sunset clause’.
- The cooling off period for off-the-plan contracts will be extended to 10 business days and deposits must be held in a controlled account.
- Contracting parties will have greater flexibility to enter into electronic agreements. Changes will clarify that land contracts and registry instruments can be signed electronically and that vendor disclosure can be given by electronic means.
- Changes will remove the traditional requirement for deeds to be in paper, allowing these to be signed and witnessed electronically.
For more information about the background to the reform including the discussion papers and submissions, please visit Submissions - Removing barriers to electronic land contracts or Off the plan contracts
Contact: Office of the Registrar General