What are these changes?
Cooling Off Period
The cooling off period in a residential off the plan Contract for Sale will be extended from the usual 5 business days from exchange to 10 business days from exchange.
This cooling off period can still be waived if the Purchaser provides a s66W Certificate from their solicitor at the time of exchange.
New Contract for Sale and Purchase of Land 2019 edition
There is a new Contract for Sale and Purchase of Land 2019 edition from the Law Society. This is to be used for all new off the plan residential Contracts for Sale.
Vendors are to attach a Disclosure Statement in the approved form to their residential off the Plan Contract for Sale. This Disclosure Statement is to be attached to the Contract for Sale before it is signed by a Purchaser. A failure to attach a Disclosure Statement entitles a Purchaser to rescind the Contract within 14 days of exchange.
The Disclosure Statement is currently a one-page document that sets out the details of the off the plan residential sale. Prescribed documents listed on the Disclosure Statement are to be attached to the Disclosure Statement. Some Prescribed Documents are the draft plan, draft 88B Instrument and proposed schedule of finishes. Any Plans attached to the Disclosure Statement must be prepared by a registered surveyor.
Service of Registered Documents
The Vendor is now required at least 21 days prior to settlement to serve the Purchaser with a copy of the registered Plan and any other document that was registered with that Plan.
The service of the registered documents may trigger a Purchasers right to rescind the Contract or claim compensation.
Services of Notices of Change
A Vendor is now required to serve at least 21 days prior to settlement a “Notice of Change” if the Vendor becomes aware that the Disclosure Statement was inaccurate in relation to a “material particular” at the time of exchange OR has become inaccurate in relation to a “material particular” following exchange.
What constitutes a “material particular” is set out in the Conveyancing (Sale of Land) Amendment Regulation 2019. A material particular includes the following if they will or are likely to adversely affect the use or enjoyment of the lot in the off the plan residential contract:
- A change to the draft plan
- An easement or covenant
- A change to the schedule of finishes
- A provision in a by-law
The Notice of Change is to be in the approved form. The approved form is yet to be released by the Registrar General.
The service of Notice of Change may trigger a Purchasers right to rescind the Contract or claim compensation.
Purchasers Right to Rescind
A Purchaser may rescind the Contract if the change notified in the Notice of Change or if the registered Plan and documents served includes any inaccuracy in relation to any Material Particular such that the Purchaser would not have entered the Contract had the Purchaser been aware of the inaccuracy AND they would be materially prejudiced.
The Purchaser can rescind within 14 days of receiving the Notice of Change or the date of receiving the registered documents.
Purchasers Claim for Compensation
If the Purchaser has a right to rescind, the Purchaser may instead claim for compensation for an amount capped at 2% of the Purchase Price. To claim compensation the Purchaser can serve a “claim notice” on the Vendor to make a claim for compensation within 14 days of receiving the Notice of Change or the date of receiving the registered documents.
Settlement of the Contract is not prevented by such a claim notice. If the claim for compensation is not finalised by the settlement date, then the depositholder holds the claim amount pending determination.
If you have any questions or wish to discuss these new changes to off the plan residential Contracts for Sale, please do not hesitate in contacting Gillian Leahy or Ross Selvaggio of this office.