Amendments To Conveyancing Act 1919
Why Do Purchasers Need To Embrace Off-The Plan?
We have all heard the saying “The Early Bird Catches The Worm” well this is true if you wish to pick the perfect brand new home for you.
Fact: All brand new apartments/Townhouses/House & Land being built today are first released for ‘Off-The-Plan’ purchase.
Fact: If you embrace this new way of purchasing – the earlier you make your decision the more apartments and price points you have the choice of.
Fact: Blue Prime Realty only represent projects where the Developer and Builder have a proven track record of Quality Built and Customer Satisfied projects.
Fact: The Government now recognises that ‘Off-The-Plan’ is the way of life for purchasing a brand new Apartment/Townhouse/House & Land. Therefore they have introduced new legislation that further protects you – The Purchaser.
The Benefits Of Purchasing Off-The Plan?
- The hardest part of buying your first home is saving the deposit. If you need to borrow money from a relative or financial institution for the deposit, the build time allows you time to make repayments on this part of the financial journey.
- You can choose your optimal location of your apartment within the development.
- You have a brand new home from a reputable Builder and Developer free of all the worries and costs of a 15-30 year old property.
Talk to Blue Prime Realty about how we can put a strategy in place as we ‘Make Real Estate Easy’.
What Changes Did The Government Make To The Legislation And Why?
There were two main concerns new home buyers had when purchasing ‘Off-The-Plan’.
1. ‘You never know what you were going to get when it was finished’.
- The new changes to the legislation is that the Vendor must provide a disclosure document that outlines key information of ‘Material Particulars’ such as Draft Plan, Schedule of Finishes and Strata Scheme By Laws. There is other information that is included in the document that Blue Prime Realty can provide to you at our first meeting.
- Purchasers can rescind the contract within 14 days of exchange if the Disclosure Statement, draft plan or relevant prescribed documents are Not attached to an off-the-plan contract before it is signed.
- Changes can occur to ‘Material Particulars’ and if they do the new laws require the vendor to notify any changes to the original disclosure document that will adversely affect the use or enjoyment of the home being sold.
- Developers will be required to provide purchasers with a copy of the final registered plan, and any associated documents, at least 21 days before settlement. Purchasers cannot be compelled to settle within that 21 day period. If the registered plan and associated documents reveal an inaccuracy in a material particular that the developer has not notified, rescission and compensation rights still apply.
- In some cases, purchasers will be able to rescind the contract because of a change to a ‘material particular’. This relief will only be available to purchasers who can show that they would not have entered into the contract had they been aware of the change, and that they are materially prejudiced by the change.
- As an alternative to rescission, purchasers may choose to remain in the contract but claim compensation (up to 2% of the purchase price) for the change. If the parties cannot agree to resolve a compensation claim, the claim can be referred to arbitration. The arbitrator’s decision is final, and the purchaser is no longer able to rescind the contract because of the change to the material particular.
2. The Sunset Clause:
Before if the market moved in favour of the Developer they could delay the finish of the project to after the date of the Sunset Clause. This would enable the Developer to rescind the contract, return the purchasers deposit and put the lot up for sale again at the higher price.
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). Sunset clauses 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.
The new laws now extend the definition of a sunset clause to capture other events which trigger termination of the contract, like the issue of an occupation certificate. Changes also confirm that the Court can award damages if the vendor is permitted to end the contract under a sunset clause. These changes are contained in new Section 66ZS introduced by the Conveyancing Legislation (Amendment) Act 2018.
10-Business-Day cooling-off period for off-the-plan contracts
The new laws extend the cooling off period for off-the-plan contracts to 10 business days (from 5). The cooling off period for contracts relating to established homes is not changed.
Deposit to be held in trust
From 1 December 2019, any money paid by the purchaser by way of deposit or installment under the contract must be retained by the stakeholder in a trust or controlled money account during the contract period. These monies cannot be released to the vendor before settlement. The new requirement will ensure deposit and installment monies are protected in the event of the developer’s insolvency.
Changes to how the deposit is held will not prevent the use of a bank guarantee or deposit bond in lieu of a cash deposit.
Source Of Information: