Changes to off-the-plan contracts and E-Conveyancing

February 15, 2019

On 13 November 2018, Parliament passed the Conveyancing (Legislation) Amendment Act 2018, heralding a suite of extra protections for purchasers of off the plan contracts and providing greater flexibility to parties that chose to use electronic contracts.
 
Major changes to off the plan contracts include:

  • A mandatory disclosure regime whereby vendors must disclose important information about the development along with key documentation such as the proposed plan and by-laws;
     
  • Developers must inform purchasers of material particular changes that occur throughout development. Material particular developments are those changes which will affect the use or enjoyment of the property (for example, if the size of the lot were to change);
     
  • A purchaser will be entitled to rescind the contract if they would not have entered into the contract had it known about the material particular change. If the purchaser is negatively impacted by the change, but chooses to proceed with the contract, they may be entitled to claim compensation from the developer;
     
  • Extension of other events to trigger sunset clauses (an event that allows either party to a contract to terminate if it has not occurred by a certain date – commonly the date the plan should be registered by) such as the issuance of an occupation certificate;
     
  • The ability of parties to claim for damages for loss if one party rescinds the off the plan contract pursuant to a sunset clause; and
     
  • Cooling off periods are extended to 10 business days for off the plan contracts (presently 5 business days for existing residential purchases).

 
The amendment seeks to encourage electronic conveyancing by removing hurdles that had previously prevented parties from conducting the entire process electronically. The main provisions include:

  • Confirmation that contracts for sale of land and registry instruments like Mortgages and Caveats can be formed electronically;
     
  • All deeds can now be signed and witnessed electronically, not just those in relation to land; and
     
  • Notices under the Conveyancing Act can now be served electronically.

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