The government of New South Wales has passed amendments to the Conveyancing Act, protecting the growing number of unplanned buyers in the state.
The changes, which came into effect this month, will impose more stringent requirements on developers regarding disclosures, cooling-off times, holding deposits and sunset clauses, particularly with regard to relates to off-plan purchases.
New South Wales has experienced strong growth in unplanned purchases over the past decade – from 2,646 in fiscal year 2008/09 to 17,218 in 2018/2019. Customer Service Minister Victor Dominello said off-plan purchases now account for 10.6% of residential property sales.
"Buying off-plan is a popular option, especially for first-time buyers, but there can be risks and uncertainties," he said.
Read also: Where is the Sydney unit market going?
Under the new rules, buyers will receive key development information, including copies of the plan, proposed regulations and schedule of finishes. This will be done before the contracts are signed.
Suppliers will also now be required to inform buyers of significant changes to what was disclosed during the initial communication. If the changes "had a significant impact" on the buyers, they will be able to terminate the contract or request compensation under the new rules.
Here are the other changes:
Obligation for suppliers to provide a copy of the final plan at least 21 days before the buyer can be forced to pay
Expand existing legislation to clarify that the Supreme Court can award damages when the seller terminates under a sunset clause
Extension of the cooling-off period to 10 working days with any deposit to be kept in a controlled account until payment
These changes will be crucial to ensuring the continuous improvement of the sector, said Minister of Regulatory Improvement and Innovation, Kevin Anderson.
"These changes are vitally important to NSW government building reforms that aim to provide greater protection for consumers, while increasing transparency, accountability and the quality of work in the sector ", he said.
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