NSW Consults On Possible Start Date For Off-the-Plan Conveyancing Reform Act and Draft Regulations
Friday 12 July 2019 @ 12.03 p.m. | Legal Research
On 26 June 2019, the NSW Government released a draft Conveyancing (Sale of Land) Amendment Regulation 2019 (NSW) ('the draft Regulation'), along with a discussion paper, for public consultation. The draft Regulation is designed to make further provisions regarding off the plan residential property contracts, as a result of the amendments set to be introduced by the Conveyancing Legislation Amendment Act 2018 (NSW).
The Conveyancing Legislation Amendment Act 2018 aims to create stronger protections and greater transparency for purchasers of off the plan residential properties. These provisions have not yet commenced, and are currently awaiting proclamation. When the provisions come into effect, they will introduce a new disclosure regime that requires developers and vendors to give a prescribed set of documents to better inform purchasers.
In his second reading speech introducing the Bill in the Legislative Council, the Hon David Clarke, on behalf of the Hon Don Harwin, said:
"The main component of the regime is a disclosure statement that is required by new
section 66ZM to be attached to an off-the-plan contract before it is signed by the
purchaser. This provision applies in addition to the existing vendor disclosure laws
required by section 52A of the Act.
The disclosure statement must be available for inspection with the contract before
the property can be advertised for sale. Attached to the disclosure statement will
be a set of prescribed documents that must include a copy of the draft plan.
Other required documents will be prescribed by regulations that will be introduced
as an amendment to the Conveying (Sale of Land) Regulation 2017 so that they sit alongside the existing vendor disclosure requirements. The precise
nature of these documents will be finalised after further consultation with stakeholders,
but will likely include proposed by-laws for strata and community properties and a
schedule of finishes, where building work is to be provided as part of the contract."
This draft Regulation has now been released for public comment. It sets out the details of the new requirements and is the precursor to the Conveyancing Legislation Amendment Act 2018 fully commencing.
The draft Regulation addresses:
- The new disclosure statement form
- Additional disclosure documents to be attached to off the plan contracts
- Remedies for purchasers where vendors have not met new standards
- Alternative remedies where material changes have occurred during development
- New warning statements to reflect the extension of cooling off periods
The draft Regulation is currently set to commence on 1 September 2019. However, in the discussion paper, the NSW Government have expressed their concern that this may not allow for sufficient time for vendors and developers to update their contracts, and they have asked for comment in regard to whether this commencement date should be delayed.
Some questions posed for consultation from the discussion paper include:
“Should the [draft] Regulation (and the off-the-plan provisions under the Amendment Act) commence on 1 September 2019? If not, when should the reforms come into operation?
Should any of the information in the draft disclosure statement be omitted from the approved form? If so, on what basis?
Should the disclosure statement require the developer to state whether the scheme will be subject to an embedded network or other agreement with third parties relating to the supply of utilities and services to the common property?
Are any of the required documents unable to be provided or would pose a significant cost to developers if required at the time contracts are prepared?
Should the [draft] Regulation prevent waiver of cooling off periods for off the plan contracts by prescribing a maximum time period by which the cooling off period can be shortened? If so, what time period would be appropriate?”
Consultation on the draft Regulation and discussion paper is currently open. Further details on the consultation and progress can be found on the NSW Office of the Registrar General's website.
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Sources:
Draft Conveyancing (Sale of Land) Amendment Regulation 2019 (NSW) and discussion paper available from TimeBase’s LawOne Service
