Page45 - Week 01 - Wednesday, 2 December 2020
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I would now like to outline the provisions in the bill. Stage 1 of the Managing Buildings Better reforms introduced new requirements for developers to give buyers of off-the-plan units a disclosure statement as part of the contract for sale. The disclosure statement gives important information about the progress of the development of the unit and the units plan. The buyer has clearer rights to rescind the contract for sale if the off-the-plan unit changes significantly prior to the contract settlement.
The bill amends the Civil Law (Property) Act to provide that if a subsidiary of a unit, such as a car park or a storage cage, decreases in size by 10 per cent or more in the disclosure statement for the unit, the change is a type 2 matter. This amendment applies to unit subsidiaries other than courtyards and balconies, which are type 1 matters, if they involve a decrease in area of 10 per cent or more.
Changes which are type 1 and type 2 matters give rise to certain rights for buyers to terminate a contract for sale if they are significantly prejudiced by the change. These amendments are intended to give buyers greater rights to terminate a contract if the size of any unit subsidiary is reduced by 10 per cent or more from what they were initially advised, and this change affects their use and enjoyment of the unit.
The bill also amends the Civil Law (Property) Act to clarify that, in calculating a change to a matter in a disclosure statement, whether it is type 1 or 2, any potential variation must be disregarded. Potential variation is the amount that may be indicated on the disclosure statement as the amount by which the size of the unit or subsidiary may vary.
This amendment makes clear that any allowable variation indicated on the disclosure statement is not to be considered in addition to the actual change in the area in calculating the maximum allowable variation before a change becomes a type 1 or a type 2 matter. The bill also provides for a definition of unit subsidiary by cross-referencing the definition in the Unit Titles Act 2001 for ease of interpretation.
The bill also removes duplication across the Civil Law (Property) Regulation and Civil Law (Property) Act by removing the provision in the regulation about a potential variation in a disclosure statement. This provision is now in the act.
Section 119 of the Unit Titles (Management) Act provides that an eligible person may request both a unit title certificate and a unit title update certificate from the owners corporation. A unit title certificate contains important information about the unit and the units plan.
The bill inserts a note into the Civil Law (Sale of Residential Property) Act to make clear that an eligible person can request a unit title update certificate. The bill also provides that an eligible person includes a person who enters into a contract for sale of a unit for which the information is required.
Buyers may not be aware of their ability to request a unit title update certificate during the process of purchasing a unit, even where they have already requested a unit title
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