Barrister and mediator, Sydney Jacobs, provides advice for those acting for purchasers of “off the plan” units in Part 2 of his property series. His series will draw upon his extensive experience in this sector of law.
Over the past few years, I have advised in quite a number of contracts of sales of units “off the plan.” If one is acting for the purchaser, one has to come to terms with ever-expanding contracts, often under time pressure. So here are a few “big picture” suggestions that you may wish to consider incorporating into your list of matters to consider when advising purchasers, based on some of the contracts I have reviewed. Naturally, this is not advice on any particular contract, and is not intended to be anything approaching a comprehensive list.
My suggestions are based on two propositions, as to a vendor’s goals:
Proposition 1: to give itself tactical amplitude in the contract to step away from the floor plan, if it wishes to;
Proposition 2: to word the contract so that the sunset date resembles a moon-phase date: something which waxes and wanes through the contract.
- ensure the floor plan included in the contract, is actually referred to in a clause, so as to make it clear that it is promissory cf Bruce v Baju Henley Square Pty Ltd [2016] SASFC 149.So often, I see floor plans that one only knows are part of the contract, because of the deployment of a bulldog clip. There is often not even a page numbering system for attachments. Ask the Vendor’s Solicitor to sign the floor plan and append in handwriting a warranty that holds at bay as much of the rest of the contract as possible (e.g. the clauses which allow deviations in floor space by up to X%; clauses which allow differences in ceiling height; and so on).
- ensure the floor plan in the contract is legible. Architect’s squiggles should have adequate legends. One needs to know the difference between (for example) a solid wall and some other type of room divider, where windows will go, where doors will be, the dimensions of balconies and so on. Dimensions ought to be spelled out, so too the standard for measuring them (various standards vie for acceptance).
- ensure the floor plan is not simply the reprint of the agent’s advertising material, with attendant disclaimers and exclusions of liability.
- make sure the unset date is clearly and simply spelled out. The more complicated the contractual schema regarding the sunset date, the less valuable the right to rescind.
In future articles, I will look at the new disclosure regime for sale off the plan of residential units, the Conveyancing Legislation Amendment Act 2018 No 75 (NSW), which was assented to on 22 November 2018, and has now come into force. It bolsters the protections for purchasers of residential units off-the-plan, by cmandating a disclosure regime by the vendor and entitling the purchaser to rescind for any material deviation, so long as the purchaser is “materially prejudiced”. This phrase seems guided and informed by Flight v Booth considerations (see below), and has some important definitions which already exist in Queensland legislation e.g. whether a purchaser “materially prejudiced” by any changes.
In future articles, I will also delve into:
- Mehmet v Carter [2018] NSWCA 305 (which looks at the principle in Flight v Booth). I will consider what light (if any) these cases will shine on the new amendments to the Conveyancing Act (above);
- cases where a purchaser has sued for relief , including return of deposit for misleading or deceptive conduct pursuant to the Competition and Consumer Act 2010 (Cth) sch 2 The Australian Consumer Law cl 4(1)(b), 18 and 30(1)(e) e.g. Birch v Robek (2014) VCC 68.
Suggestions as to topics, general feedback and positive criticism is welcomed on sjacobs@13wentworth.com.au
With over 20 years’ experience as a barrister, Sydney Jacobs practices in the areas of commercial law and equity, real property and building and construction law. He has acquired experience in the area of easements: he has obtained easements for applicants and otherwise appeared in the cases listed below, has a number of current matters in the NSW Equity Division Real Property List being case -managed to final hearing 2018 and is briefed in certain easement matters being worked up for filing in Court. Prior to being called to the Bar, Sydney was a solicitor in the well -known firms listed below, as a commercial litigator with a construction law focus. Sydney has experience in acting for clients seeking or opposing easements and clients whose rights of way have been impeded by neighbours. You may connect with Sydney via email sjacobs@13wentworth.com.au or LinkedIn
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