New laws better protect off-the-plan buyers
NSW home buyers purchasing residential properties off-the-plan will benefit from stronger protections under new laws endorsed by Parliament last night. The changes to the Conveyancing Act affect disclosures, cooling off periods, holding of deposits and sunset clauses.
Minister for Finance, Services and Property Victor Dominello said the number of off-the-plan sales has increased from just over 2,000 in 2006/07 to nearly 30,000 in the last financial year, which accounts for about 12 per cent of all residential property sales in NSW.
“Buying off-the-plan has become more popular among first home buyers in recent years. While it works well in most cases, we’ve all heard the horror stories when things go wrong,” Mr Dominello said.
“The new laws will bolster existing protections for buyers, by establishing minimum disclosure standards and ensuring that developers are held accountable for delivering what they promised at the time of purchase.
“We have also given the Supreme Court additional powers to stamp out misuse of sunset clauses by developers.”
The reforms include:
- Buyers being provided with a copy of the proposed plan, proposed by-laws and a schedule of finishes before contracts are signed;
- Vendors providing a copy of the final plan (and notice of changes) at least 21 days before the buyer can be compelled to settle;
- Allowing buyers to terminate the contract or claim compensation if they are materially impacted by changes made from what was disclosed;
- 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.
The reforms follow a public consultation and are supported by stakeholders including the Owners Corporation Network and the Law Society of NSW. For more information visit www.registrargeneral.nsw.gov.au.