Off the plan contracts review: consultation now open
The NSW Government is seeking feedback from the community and the conveyancing and property industries about current issues affecting buyers of property off the plan and the effectiveness of the off the plan disclosure regime under the Conveyancing Act 1919 and Conveyancing (Sale of Land) Regulation 2022.
A discussion paper released today outlines options to bolster existing consumer protections and to address emerging issues in this sector, including:
- introducing minimum readiness requirements before residential land can be sold off the plan
- enhancing disclosure requirements for off the plan contracts
- imposing penalties for developers who offer to sell residential land off the plan without appropriate disclosure
- expanding existing sunset clause protections to include other conditional events, like the need for development approval by a certain date
- solutions to address the increasing size of off the plan contracts.
A major focus of the paper is whether minimum readiness preconditions should be met before a developer can offer land for sale off the plan (like owning the land before being able to sell it), or whether further disclosures are needed so that buyers have more clarity about the proposal.
The discussion paper responds to community concerns about developers selling land off the plan before they own the land to be subdivided, or before having lodged a development application.
In 2019, major reforms imposed a robust disclosure regime for developers who sell property off the plan, giving buyers more information up front, and remedies that include compensation in some cases if there are changes to what was disclosed. Despite these changes, reports continue to emerge of cases where buyers are having their contracts rescinded under special conditions that are not ‘sunset clauses’ and are missing out on purchasing a home months after they have exchanged contracts, with the current regime not providing a remedy.
The NSW Government wants to ensure that buyers are protected, and that the off the plan contract laws continue to meet the needs of the community effectively.
Consultation closes 5pm Friday 23 December 2022.
Please email a formal submission to [email protected].