In brief - Contract changes that buyers and sellers of land in NSW should know about
The 2014 edition of the Contract for Sale and Purchase of Land features a number of changes to the 2005 edition, including new clauses on electronic conveyancing and default by the vendor, as well as removal of references to "vendor's duty".
Contract released in November 2014
The new 2014 edition of the Contract for Sale and Purchase of Land was issued by the Joint Copyright Holders, Law Society of New South Wales and the Real Estate Institute of New South Wales, in November 2014. The last draft of the contract was released in 2005.
While the 2005 edition of the contract was issued in both paper and electronic formats, the new contract has been released in an electronic format only.
Differences between the 2005 edition and the 2014 edition
Although the contract is largely the same as the 2005 edition, it contains a few changes:
- The contract has been renamed, from "Contract for Sale of Land" to "Contract for Sale and Purchase of Land".
- The front page of the contract has a few changes, including the addition of buyer's agent as well as storage spaces as an improvement and solar panels as a possible inclusion.
- There are a few new boxes to tick, including the vendor agreeing to accept a deposit bond and the parties electing to use the new electronic conveyancing for completing the purchase.
- One change that was badly needed was the removal of references to "vendor's duty". Although it was still relevant at the time the 2005 edition was being prepared, shortly after release the vendor's duty was scrapped.
- A new clause on "breach by the vendor" has been added. This new clause 8.2 is important because in the previous drafts of the contract there had been extensive clauses in relation to termination for default by the purchaser, but there was no corresponding clause in relation to default by the vendor. This lack of mutual breach clauses could be seen as being an unfair contract term. The new clause restores the balance.
- There is a new clause 30 on electronic conveyancing. Given the rollout of electronic conveyancing over the last year and the fact that it is expected that the first settlements of transfers in NSW will occur using the new electronic system at the time of publication of this article, the joint copyright holders thought it would be a good idea to put in an extensive clause that dealt with all of the key steps and processes required in order to complete a matter using the new electronic conveyancing.
New electronic conveyancing clause
The new clause 30 on electronic conveyancing sets out a mechanism for the party's representatives to confirm if it is proposed that the matter will proceed using electronic conveyancing and a mechanism for a party's representative to notify the other party that the matter will need to default to the paper environment, as well as the payment of fees and costs associated with that change.
The electronic conveyancing clause sets out:
- How to go about creating the work space
- How to populate the work space with data
- How to send certain invitations to join the work space
- Subsequent communications between the parties as they prepare for settlement
- Timeframes for the supply of adjustment figures, completion of a financial settlement schedule and digital signings of all things necessary for each settlement
Consequences of computer systems being inoperative
The new clause 30 on electronic conveyancing provides a default mechanism for the provision of settlement documents outside the work space if not otherwise agreed by the parties and sets out the consequences of the computer systems of the land registry, the Reserve Bank of Australia or the electronic platform being inoperative at the completion time.
Amendment of other contract clauses as necessary
Finally, the electronic conveyancing clause provides for amendment of other clauses of the contract as necessary, for example clause 16 is amended such that the place for settlement becomes the work space.
This article has been published by Colin Biggers & Paisley for information and education purposes only and is a general summary of the topic(s) presented. This article is not specific legal or financial advice. Please seek your own legal or financial advice for any questions you may have. All information contained in this article is subject to change. Colin Biggers & Paisley cannot be held responsible for any liability whatsoever, or for any loss howsoever arising from any reliance upon the contents of this article.