Transcript How to get out of “off the plan” Contracts and the new

“Off the plan” Contracts and the new
Sale of Land (Rights and Duties of
Parties) Bill
Alistair Wyvill SC
Vince Peters
William Forster Chambers &
the Law Society of the NT
Litigating “Off the Plan” Contracts
 Remedies
 Remedies
under contract
under the
TPA/CAFTA
Contract - context
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Property subject to the contract does not
yet exist
Control over the creation of the property
is with vendor only
Knowledge of the nature of the property
is principally with the vendor
Section 26K of Unit Titles Act
(1)Each contract entered into by a developer for the
sale of a unit, proposed unit or other interest in a
condominium development... shall..., be deemed to
be subject to the condition that the developer will
construct and complete the condominium
development in accordance with the disclosure
statement, and each successor in title to a unit or
interest so sold shall be deemed to be the original
purchaser from or contractor with the developer and may
enforce the contract accordingly.
(2)A person is incapable of contracting out of the effect of
subsection (1).
See also s.26ZA (estate developments)
Disclosure Notice
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Plans of areas including common
areas
“schedule of materials and
finishes”
Commencement and completion
dates
Grounds for avoiding contract.
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Misrepresentation - fraudulent,
negligent, innocent
Failure of a condition
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Breach of condition
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Subject to finance, etc: Parland (1995) 5 Tas R
121
Notice requirements: Chin v Frances Park
Disclosure statement
Breach of “conditions” of the contract
Repudiation
Remedies
Terms of agreement
Election between inconsistent remedies
Specific performance
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vendor
purchaser
Forfeiture of deposit/bank guarantees
Damages
TPA/CAFTA
Types of misrepresentation
 Existing fact
 Future matter – reasonable grounds: s.51A
 Statement of intention
 Opinion (as to existing fact or future
matter)
a positive unqualified prediction may be misleading
if relevant circumstances show a need for some
qualification to be attached or the possibility of nonfulfillment to be disclosed as a requirement of fair
trading
Wheeler Grace (1989) ATPR 40-940
TPA/CAFTA
Types of misrepresentation – off the plan
contracts
 attributes of property when constructed –
size/quality present fact/future
matter/intention?
 market conditions: Henville v Walker
(2001) 206 CLR 459
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current value of “the property”
number and value of comparative sales
value when completed
rentability
Effect of exclusions/limitations in
contract
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Conduct must be considered as a whole
Entire agreement clauses – do not exclude
misrepresentation claims as such:
Inntrepreneur [2000] 2 Lloyds Rep 611
No reliance on any representations not
included in contract: “evidentiary estoppel”
“purchaser should make own enquiries”
clause: Butcher v Lachlan Elder (2004) 218
CLR 592
SALE OF LAND (RIGHTS &
DUTIES OF PARTIES) BILL
DISCLOSURE STATEMENT
COOLING OFF PERIOD
COMPENSATION
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Person who prepares document is
liable to compensate buyer if
document is misleading or prepared
without exercise of reasonable skill
and care.
Section 24
SECTION 3-DEFINITIONS
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Encumbrance
Land
Lot
Required Certificate
Required Document
Required Report
Residential Property
REQUIRED CONTENT
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Proposed Contract
Title Search
Particulars of registered and
unregistered encumbrances
All registered documents pertaining
to an existing unit on a Unit Plan
Certificates required by regulation
Criminal Code Applies
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Be wary of recklessly or carelessly
preparing the document.
PENALTIES
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100 penalty units for failure to
provide the disclosure document or
not taking care to ensure its
provision
Exemptions
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Unit or Lot to be created
Related party transactions
Joint tenants and tenants in
common
Exercise of option longer than 60
days
WHEN REQUIRED
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When property is offered for sale
BUYER MAY RESCIND
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If no disclosure
If disclosure contains error or
omission of material particulars
Rescission at no cost to Buyer-full
deposit refund
No commission or expenses payable
by Seller
Buyer may rescind or complete and
pay damages
PRACTICAL IMPLICATIONS
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Instruction Sheets
Professional Indemnity
Marketing tool
Real Estate Agents
COOLING OFF
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4 Day cooling off period
Starts day after contract signed
Applies only to residential property
not sold by tender or auction or sold
within 4 days before or 2 days after
auction
CERTIFICATES
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To waive or shorten cooling off
period
Given by legal practitioner or
licensed conveyancing agent
Format required by Section 21
RESCISSION NOTICE
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Must be given during the cooling off
period
No cost to buyer
No commission to sellers agent
Can be signed by buyer or buyer’s
legal practitioner or conveyancing
agent
Can be given to seller or seller’s
legal practitioner or conveyancing
agent
TRANSITIONAL PROVISIONS
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Does not apply to listings made
within 6 months prior to Act
commencing AND if contract within
6 months after Act commences
Conclusion and Questions