In 2018, the NSW government introduced the Conveyancing Legislation (Amendment) Act 2018, giving stronger protections to residential purchasers under off the plan contracts. In response, the Real Estate Institute of NSW (REINSW) has called for protective and financial risk provisions to be extended to all parties involved in off-the-plan contracts. In the Government’s Discussion Paper released in July, one of the proposed regulatory changes is that s19A of the Act would allow a purchaser to, rather than rescind an off-the plan contract, claim from the vendor 2% of the property’s purchase price in compensation in the event that a “material particular” changes.
In response to the discussion paper, the REINSW submitted that in some circumstances a purchaser may take issue with changes made to property, particularly where they impact the size of the development, however, such changes are not always necessarily made at the request of the developer. REINSW has recommended that the government considers “how its consumers and developers deal with the circumstance where the built property is not the same as the off the plan contract through no fault of the developer”. They also asked the government to consider the circumstances in which the land of a property increases in size due to changes requested by a council, as it increases the value of the property. In this instance the REINSW is urging the government to include a provision whereby a developer may charge the purchaser for an amount that reflects “any increase in land size.” To read more about REINSW submissions please click here.