KEY TAKEAWAYS: New disclosure obligation: Vendors selling residential property in NSW must disclose if the property is connected to an embedded electricity network by including the required information in the Contract for Sale Why it matters: The disclosure helps understand how electricity is supplied and billed, promoting transparency and allowing them to make informed purchasing decisions What vendors should do: Before listing a property, confirm whether it is part of an embedded network and work with your solicitor or conveyancer to ensure all required disclosure documents are included to avoid delays or legal issues Selling a property in New South Wales comes with a range of legal disclosure obligations designed to ensure buyers have access to important information before entering into a contract. A recent change now places an additional responsibility on vendors whose properties are connected to an embedded network (e.g., electricity, water, internet). Understanding these new requirements is essential to avoid delays, minimise the risk of contract disputes, and ensure compliance throughout the sale process. What is an Embedded Network? An embedded network is a private network that supplies a service to multiple premises from a single connection to the main electricity grid, and the property owner has no choice but to elect a different supplier. Rather than each property having its own direct electricity, water, internet, etc. account with a selected retailer, the service is supplied through the embedded network operator. Embedded networks are commonly found in: Apartment buildings Retirement villages Mixed-use developments Residential estates Caravan and lifestyle parks Owners within these developments may receive bills from the embedded network operator rather than a traditional retailer, for example a bill from Altogether Pty Ltd for water supply instead of from Sydney Water. What Has Changed? Recent amendments to the NSW property disclosure requirements mean that vendors must now disclose if the property being sold is connected to an embedded network. This information forms part of the prescribed documents that accompany the Contract for Sale of Land. The purpose of the reform is to improve transparency and ensure purchasers are aware of any embedded network arrangements that may affect their ownership and ongoing costs before they commit to purchasing the property. Why This Matters Being connected to an embedded network can influence how services are supplied, billed and managed. A purchaser may wish to understand: Who supplies the service; Whether alternative suppliers are available; How service charges are calculated; Any ongoing fees associated with the service; and Whether there are any restrictions on changing providers. Providing this information upfront allows purchasers to make informed decisions and reduces the likelihood of issues arising after exchange. What Should Vendors Do? If you are considering selling your property, it is important to determine whether your property is serviced by an embedded network. Your conveyancer can help identify whether the disclosure requirement applies and ensure the correct documentation is included with the Contract for Sale. If you own a lot within a strata or community scheme, your strata manager or owners corporation may also be able to confirm whether the development operates under an embedded network. Consequences of Failing to Disclose Failure to provide the required disclosure may expose a vendor to legal risks, including: Delays to the sale process; Requests for additional information; Potential contractual disputes; and In some circumstances, a purchaser obtaining rights that may affect the enforceability of the contract Ensuring all required disclosure documents are prepared before the property is listed can help avoid unnecessary complications. Preparing for a Smooth Sale The introduction of embedded network disclosure requirements reflects the NSW Government’s ongoing focus on improving transparency in residential property transactions. If you are planning to sell your property, now is an ideal time to review your disclosure obligations with your legal representative. Confirming whether your property is connected to an embedded network early in the process will help ensure your Contract of Sale is complete, compliant and ready for the market. Professional Legal advice before listing your property can save time, reduce risk and provide confidence that all statutory disclosure requirements have been met. ABOUT KAY VITOGIANNIS: Kay joined the Coutts team in May 2021, working as a Licensed Conveyancer within our Property & Conveyancing team, based in our Narellan office. Kay has over 20 years of experience in the Legal industry. She began her journey in CBD Conveyancing firms as a secretary and attained her Advanced Diploma in Conveyancing in December 2010. For further information,n please don’t hesitate to contact: Kay Vitogiannis Licensed Conveyancer info@couttslegal.com.au 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 in relation to this blog, including all or any reliance on this blog or use or application of this blog by you. Contact Us