Written by The treatment of put options in residential property transactions has now been clarified. The Conveyancing and Real Property Amendment Bill 2025 (NSW) resolves the uncertainty that arose following the Supreme Court’s decision in BP7 Pty Ltd v Gavancorp Pty Ltd [2021] NSWSC 265. In this case, the court unintentionally extended cooling-off rights to purchasers when a vendor exercised a put option.
Under the amendments, the Conveyancing Act 1919 (NSW) now defines ‘option’ to include both put and call options. This ensures consistent treatment: cooling-off rights apply only at the entry into an option agreement, not when the option is exercised. Vendors can therefore proceed with greater confidence that contracts formed by the exercise of put options will not face a risk of rescission.
The reforms also amend the prescribed wording of the required statement specifying the terms of cooling-off rights under the Conveyancing (Sale of Land) Regulation 2022 (NSW). A transitional period from 15 August 2025 to 31 May 2026 allows for outdated statements without invalidating contracts.
The message is clear: put options now follow the same legal framework as call options. This amendment restores certainty and strengthens the reliability of option-based residential transactions in NSW.