This article is from the Australian Property Journal archive
LAND sellers in Victoria must comply with new vendor's statements requirements and due diligence checklists or risk having their sale contract torn up, according to lawyers Clayton Utz.
In a note to clients, Clayton Utz advised that from 1 October 2014, vendors may also need to ensure they respond to two other changes to the Sale of Land Act 1962 (Vic) and to the Estate Agents (Contracts) Regulations 2008 (Vic), including new due diligence checklists.
The firm said some of the amendments are intended to ease the administrative burden on vendors of land.
“For example, a vendor is only required to provide a vendor’s statement to the purchaser before the purchaser signs a contract for the sale of land. Previously, a vendor was also required to include a vendor’s statement in the sale contract. In addition, from 1 October 2014, vendors are permitted to sign a vendor’s statement by electronic signature,”
Under the new requirements, the vendor’s statement must:
– include the name of any planning overlay affecting the land;
– disclose essential services which are not connected, rather than information on essential services whether or not connected;
– where there is an owners corporation, include specified information, whether from a certificate prepared by the owners corporation, or from information held by the vendor;
– and attach the Register Search Statement (title search) for the land, and the part of the search statement referred to as the “diagram location” that identifies the land and shows the location of the land, rather than a copy of the certificate of title for the land.
If the vendor fails to comply with the new requirements, the purchaser may cancel the contract of sale.
“Therefore, it’s essential that a vendor includes all required information, including that introduced by the Amendment Act, in a vendor’s statement,” Clayton Utz urged.
The new laws have also increased the penalty for a vendor who knowingly or recklessly supply false information.
The maximum penalty has been increased from 50 penalty units to 300 penalty units in the case of a body corporate ($44,283 based on the current penalty unit rate from 1 July 2014 of $147.61); and 60 penalty units in any other case ($8,856.60 based on the current penalty rate).
It is also now an offence for a vendor to fail to give a purchaser a signed vendor’s statement at all, before the purchaser signs the contract of sale of land.
Furthermore, the government has also introduced a new due diligence checklist.
Clayton Utz said in the case of vacant residential land or land on which there is a residence, a vendor must provide the purchaser with a due diligence checklist, which must be in the form prescribed by the Director of Consumer Affairs Victoria, and must be published on CAV’s website.
Where the checklist is required, the vendor must provide the checklist to the purchaser, unless there is a licensed estate agent acting for the vendor, in which case it is the agent’s responsibility to provide the purchaser with the checklist.
If a vendor fails to provide a due diligence checklist, the maximum penalty is 60 penalty units ($8,856.60 based on the current penalty rate).
Finally, Clayton Utz advised that any contracts of sale of land which use the general conditions prescribed under the Estate Agents Regulations, but which have not been signed by both parties by 1 October 2014, must be updated to include the new general conditions prescribed by the EA Regulations.
Australian Property Journal
