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New laws for off-the-plan purchases in NSW set to increase transparency

Sequana House

Changes to the Conveyancing Act 1919 and Conveyancing (Sale of Land) Regulation 2017 have been enacted in New South Wales (NSW). These new requirements for residential off-the-plan contracts came into effect on December 1 2019, and aim to bring “greater transparency and certainty” for purchasers.

Under the new changes, both vendors will be required to provide more information before and after a contract is signed, including:

  • Key information about the development, including copies of the proposed plan, proposed by-laws and a schedule of finishes before contracts are signed,
  • Notifying purchases of material changes to what was disclosed, and
  • Providing a copy of the final plan at least 21 days before the buyer can be compelled to settle.

Other changes have altered legal requirements and clarified some elements like damages, including:

  • Buyers can now end the contract or claim compensation (in some cases) if they are materially impacted by changes from what was disclosed,
  • Existing legislation was widened to clarify that the Supreme Court can award damages where the vendor terminates under a sunset clause, and
  • The cooling-off period was extended to 10 business days, with any deposit to be held in a trust or controlled account until settlement.

The aim of these changes is to give buyers greater trust in the off-the-plan property industry. This is a direct result of some projects defaulting or suffering from faulty builds over the last year or so.

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As the NSW Office of Fair Trading said, “The changes bring greater transparency and certainty for purchasers who buy residential property off-the-plan and follow an extensive review by the Office of the Registrar General.”

Written: 8 April 2020

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