Northern Territory Explanatory Statements
LAW OF PROPERTY AMENDMENT (SALES OF RESIDENTIAL PROPERTY) BILL 2005
LAW OF PROPERTY AMENDMENT (SALES OF RESIDENTIAL PROPERTY) BILL SERIAL 13
GERRY WOOD MLA - INDEPENDENT MEMBER FOR NELSON
The purpose of this Bill is to amend the Law of Property Act.
These amendments will promote consumer protection by introducing vendor disclosure within sales of residential land and property in the Northern Territory.
This will be done by the vendor obtaining reports or certificates describing the status of the property or various improvements to the property. A cooling-off period will also exist during which the purchaser may reconsider their decision to purchase.
NOTES ON CLAUSES
Clause 1. Short title
When passed, the bill may be cited as the Law of Property Amendment (Sales of Residential Property) Act 2005
Clause 2. Commencement
The Act will come into operation on the date fixed by the Administrator in the Gazette.
Clause 3. Principal Act amended
The Act to be amended is the Law of Property Act.
Clause 4. New Part 6, Division 5
A new Division 5 with new sections will be inserted into the Principal Act:
Definitions for terms used are described:
· bore status report;
· building status report;
· family member;
· pest inspection report;
· pest treatment report;
· prospective purchaser;
· related person;
· required documents;
· rescission notice;
· residential property;
· septic tank status report; and
· any encumbrance on the property;
78B Residential property
Residential Property is defined as vacant land where construction of one or more residences is permitted, or land where there is already one or more residences, or land where such residences are under construction. It is also defined as a building lot, lot or unit in the Unit Titles Act.
78C Required documents
This lists documents which are required for the sale of residential property:
· a building status report;
· a pest treatment report if the residence is occupied; or if the residence is completed but unoccupied, a pest treatment certificate; or if the residence is still under construction, a written agreement to obtain a pest treatment certificate;
· a bore status report if water is supplied from a bore;
· an occupancy permit or approval to occupy under the Building Act if relevant;
· the relevant certification under the Swimming Pool Safety Act if the residence has a swimming pool;
· a septic tank status report if there is a septic tank installed;
· a diagram showing the approximate boundary or the 1% annual exceedance probability or seepage line if the property is subject to flooding or seepage within 200m of any residence on the property; and
· a storm tide map for the area if the property is in a storm tide hazard area.
· the vendor or the vendor's agent or lawyer; or
The contents of these reports or certificates will be clarified in the regulations.
These reports or certificates must have been carried out no later than three months before the day the property was first listed for sale.
The reports or certificates must be prepared by a person who is not:
· a family member of the vendor or their agent or lawyer; or
· a member of a firm that the vendor, their agent or lawyer (or a family member of these persons) is a member of; or
· another person carrying on a business in which any of these persons may have a direct or indirect right to participate in the profits of that business.
· the purchaser is a corporation; or
The person who prepares the reports or certificates listed in this section has to possess professional indemnity insurance as required by the regulations.
78D Application of Division
Division 5 does not apply to contracts made before this new Act was commenced. It also does not apply to sales where the purchaser is related the vendor. It also has effect no matter the term of contract for the sale.
78E Required documents to be available for inspection
The vendor must make sure the reports and certificates listed in 78C are available for inspection by any prospective purchaser at all times. If not, the penalty is 10 penalty points (if offender is a natural person) or 50 penalty points (where the offender is a body corporate).
78F Cooling-off period
A cooling-off period will exist except where:
· the property is sold by tender or auction; or
· under section 78G, the purchaser waives the cooling-off period.
The cooling-off period begins from when the contract is made and ends at 5pm on the following third working day. This period may be extended or shortened by a provision in the contract or by written agreement between the parties.
78G Purchaser may waive cooling-off period
Before signing a contract, the purchaser may waive the cooling-off period if they have received legal advice and that lawyer has signed a certificate under section 78K, a copy of which has been given to the vendor.
78H Right to rescind during the cooling-off period
During the cooling-off period, the purchaser may give the vendor a rescission notice to withdraw from the contract of sale. This notice must be signed by the purchaser or their lawyer and is ineffective if given after completion of the contract.
78J Consequences of rescission
If a rescission notice is given under section 78H, the contract is rescinded from the time the notice was made. Any deposit that was paid must be paid back to the purchaser. No other damages, costs or expenses will be due.
This certificate relates to that required under section 78(5)(b) or 78G(b) - a certificate signed by a lawyer shortening the cooling-off period. The certificate has to be in writing by a lawyer not acting for the vendor or who is a member or employee of a firm which the vendor may be a member or employee.
78L Purchaser to reimburse vendor for cost of certain reports
Once a contract for sale is completed, the vendor is entitled to reimburse the cost of obtaining the reports and certificates from the purchaser.
78M Offence for false or misleading report or certificate
It will be an offence for a person to give a prospective purchaser a report or certificate containing false or misleading information. Penalty for a natural person will be 100 penalty units; for a body corporate will be 500 penalty units.
78N Compensation for false or misleading report or certificate
If a purchaser incurs a loss or expense because they received false or misleading information in a report or certificate, the person who prepared that report or certificate is liable to compensate the purchaser.