The Law Society of New South Wales and the Real Estate Institute of New South Wales have recently released a 2022 edition of the NSW contract for sale and purchase of land. The previous edition was the 2019 edition. Unless amended by the vendor’s legal representative, these terms form part of all contracts for the sale and purchase of land.
Many of the changes in the 2022 edition of the new contract were brought about by the amendments to the Conveyancing (Sale of Land) Regulation 2022 (Regulation) which commenced 1 September 2022. The 2022 edition includes the revised forms of prescribed notices and cooling off notices as required by the Regulation.
The Regulation allows for the following transitional period:
For contracts dated between 1 September 2022 and 28 February 2023, the 2019 edition may still be used.
For contracts dated from 1 March 2023, the 2022 edition must be used.
There are a combination of stylistic and substantive changes between the 2019 and 2022 edition. The main updates to note are set out below.
Standardisation of electronic transactions
The revised edition emphasises the predominance of electronic conveyancing, with transactions now having to be facilitated through electronic lodgement networks such as PEXA. Accordingly, greater emphasis has been placed on areas such as electronic execution, electronic workspaces and e-lodgement subscribers. For example, the vendor or deposit holder can now request evidence of an electronic funds transfer. Further, the execution page no longer includes a witness prompt, given the shift toward electronic signatures.
Changes to prescribed warnings and inclusions
Pursuant to the Regulation, the prescribed warnings section of the Standard Terms has been amended so that all residential contracts must provide for smoke alarms and loose-fill asbestos insulation from 1 March 2023.
There has also been an increase in types of items considered inclusions. Specifically, items such as air conditioning, ceiling fans and electronic vehicle chargers now fall under this category.
In terms of tax considerations, the 2022 standard contract has reduced the amount of time to serve evidence of a GST Residential Withholding payment from 5 to 2 business days.
The new form of contract also makes reference to the introduction of annual property tax for eligible first home buyers.
For general advice relating to these changes, please contact our people.
Ron Zucker 0410 590 111
Eollyn Cortes 0478 727 395
Chelsea Woodward 0404 065 899
Anna Polhill 0431 174 352