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Changes to Off-the-Plan Contracts from 1st December 2019

Off-the-plan Contracts

As of 1 December 2019 new legislation has been brought in to increase disclosure obligations on developers when selling off-the-plan property.


New changes to bring:

  • Greater transparency
  • New remedies
  • Stronger predictions

for off-the-plan purchases.

So, what has changed:

  • Vendors will have to attach a Disclosure Statement to the contract. The Disclosure Statement outlines key information, such as sunset dates and events that are a condition under the Contract such as timeframes for settlement and extensions of the sunset date.
  • Included with the Disclosure Statement will be a draft plan, which must show basic details such as:
    • o Lot number and lot area;
    • o Location of any proposed easements, restrictions or positive covenants
    • o For lots in strata plans – a draft floor plan and draft location plan. However, details for any storage area or parking are not required to be disclosed at this stage.
    • o For lots in community title, precinct or neighbourhood schemes – the draft location diagram, draft detail plan and draft community, precinct or neighbourhood property plan.
  • Further documents to be provided are:
    •  proposed schedule of finishes
    •  any s88B instrument proposed to be lodged with the plan
    •  for lots in a proposed strata scheme, the draft by-laws
    •  for lots in a proposed community, precinct or neighbourhood scheme, the draft management statement and the draft of any proposed development contract
    •  for land that comprises or includes a lot in a proposed development scheme, the draft strata development contract
    •  for lots in a proposed strata scheme that relates to a part strata parcel, a draft strata management statement required under section 99 of the Strata Schemes Development Act 2015 for the registration of the strata plan,
    •  for land that will be subject to a building management statement under the Act, the draft building management statement.

What if the Disclosure Statement and required documents are not provided?

The purchaser has 14 days after the date of exchange to rescind the Contract.

If changes happen after the Contract is issued does the Developer/Vendor have to tell the purchaser?


The Developer/Vendor is required to notify purchasers of changes that results in the information previously disclosed being inaccurate in a ‘material particular’. These are changes that are considered to adversely affect the use or enjoyment of the lot being sold. These changes may include:

  • the draft plan
  • by-laws
  • schedule of finishes
  • easements or covenants
  • a strata management statement or building management statement
  • a management statement for a community, precinct or neighbourhood scheme
  • a development contract or strata development contract.

These changes must be notified to the purchaser using a standard form.

Changes that are not considered ’material particular’ include:

  • changes to the proposed lot number or street name
  • a change to, or the inclusion of, a provision for the allocation of the costs of shared expenses in a building management statement or strata management statement;
  • for lots in a proposed strata scheme—a change to, or the inclusion of the specific location or area of the parking or storage area, but only if the change or inclusion is made according to the terms of the contract

What rights does the Purchaser have if they receive notification of a change to a ‘material particular’?

Purchasers will be able to rescind the contract because of a change to a ‘material particular’. In order for a purchaser to exercise this right, the purchasers must show that they would not have entered into the contract if they had been aware of the change, and that they are materially prejudiced by the change.

This right arises following notification of a change as outlined above, or because the purchaser is served with a registered plan that reveals a change to a material particular.

As an alternative to rescission, purchasers may choose to remain in the contract but claim compensation (up to 2% of the purchase price) for the change.

If a purchaser choses to exercise their right for rescission or compensation this must be done within 14 days of being notified of the change to a material particular, or of being served with the registered plan that reveals the inaccuracy, as the case may be.

Extended cooling off period

The new laws extend the cooling off period for off-the-plan contracts to 10 business days (from 5). The cooling off period for contracts relating to established homes is not changed.

Where is this change in the Contract for Sale?

To reflect the longer cooling off period, the cooling off warning notice form, as prescribed, has also changed and is required to be included in all off-the-plan contracts from 1 December 2019. With the new form required in all contracts from 2 June 2020.

Timeframe for Settlement following registration of the Plan

Purchasers will now have a standard 21 days after receipt of the registered plan and associated documents, before they can be required to settle. This is an increase on the current standard of 14 days.

If the registered plan and associated documents reveal an inaccuracy in a material particular that the developer has not notified, rescission and compensation rights still apply.

Holding the Deposit

From 1 December 2019, any money paid by the purchaser by way of deposit or instalment under the contract must be retained by the Developer/Vendor’s solicitor or nominated agent in a trust or controlled money account during the contract period. The Developer/Vendor can no longer request access to the deposit under a release of deposit clause prior to settlement. The new requirement will ensure deposit and instalment monies are protected in the event of the developer’s insolvency.

This change does not prevent the use of bank guarantees or deposit bonds where agreed to the by the Developer/Vendor.

Protection for Purchasers under sunset clauses

Sunset clauses allow either party to terminate an off-the-plan contract should a certain event, like the registration of the plan, not occur by a specified date. In 2015, laws were introduced to prevent Developers/Vendors from using sunset clauses to end contracts without an order from the Supreme Court (unless the purchaser agrees).

Under the new laws the definition of a sunset clause has been widened to capture other events which trigger termination of the contract, such as issuing an occupation certificate.

These changes also confirm that if deemed necessary the Court can award damages if the Developer/Vendor is permitted to end the contract under a sunset clause.

What happens now?

These changes will see Developers/Vendors being more transparent in their dealings with purchasers on off-the-plan property. These changes strengthen the position for purchasers as well, ensuring that they have remedies available to them if required.

For further information please don’t hesitate to contact Coutts Lawyers.
1300 268 887

Contact Coutts today.


This blog is merely general and non-specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever to this blog, including all or any reliance on this blog or use or application of this blog by you.

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