Prospective homebuyers will be better protected under sweeping changes to the law governing off-the-plan contracts. Changes to the Conveyancing Act, which take effect on 1 December 2019, will see much tighter requirements imposed on developers regarding disclosures, cooling-off periods, holding of deposits and sunset clauses.
Minister for Customer Service Victor Dominello said the number of off-the-plan purchases in NSW had increased significantly in the last decade from 2,646 in the 2008/09 financial year, to 17,218 in 2018/19, which represents 10.6 per cent of residential property sales.
“We are delivering on our commitment to better protect home buyers by closing down loopholes and increasing disclosure standards across the board,” Mr Dominello said.
The changes include:
· Buyers being provided with key information about the development, including copies of the proposed plan, proposed by-laws and a schedule of finishes before contracts are signed;
· Requiring vendors to notify purchasers of material changes to what was disclosed;
· Allowing buyers to end the contract or claim compensation in some cases if they are materially impacted by changes made from what was disclosed;
· Vendors providing a copy of the final plan at least 21 days before the buyer can be compelled to settle;
· Widening existing legislation to clarify that the Supreme Court can award damages where the vendor terminates under a sunset clause; and
· Extending the cooling-off period to 10 business days with any deposit to be held in a controlled account until settlement.
“Buying off-the-plan is a popular option, particularly for first home buyers, but there can be risks and uncertainties involved,” Mr Dominello said.
Minister for Better Regulation and Innovation Kevin Anderson said: “These changes are vitally important for the NSW Government’s building reforms which aim to deliver greater protections for consumers, while increasing the transparency, accountability and quality of work in the sector.”
For more information visit www.registrargeneral.nsw.gov.au.