> Consumer advice  > Buying or selling a home  > Changes to the Vendor's Statements September 2009

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• Changes from 1 September 2009
• Transitional provisions

Changes from 1 September 2009

Changes to the Vendor's Statements under sections 7 & 8 of the Land and Business (Sale and Conveyancing) Act 1994

The Land and Business (Sale and Conveyancing) Act 1994 and regulations require a person who sells land or a business to disclose information to the purchaser of the land or business using the Form 1 and Form 2.

There will be changes to these forms from 1 September 2009. Further minor amendments will come into operation on 1 March 2010 and 31 August 2010.

The key changes are outlined below.

Items in the Table of Particulars
In the table of particulars set out in the regulations the core (mandatory) items appear at the top of the table as before. For ease of reference, the remaining items are in alphabetical order.

Information notice for purchasers of strata units and community lots
As a result of recommendations by the Attorney-General, additional information about strata and community title obligations and restrictions is required when the property being sold is a strata unit or community lot. The regulations require that a new information notice, placed at the end of the Form 1 and 2 vendor's statement, be included for these purchasers.

The notice can be removed in cases not involving strata or community title.

New disclosure requirements where a strata or community lot/unit is being sold
Vendors are now required to attach:

• (for community lots) the scheme description and development contract, if any, and a copy of the by-laws,

or

• (for strata units) a copy of the articles,

and

• copy of minutes, statement of accounts and current insurance policies (where obtained in time from the strata or community corporation).

The requirement for vendors/agents merely to advise that they have applied to the body corporate for documents and particulars is retained; however the community scheme description, development contract and by-laws must now be provided as these can be obtained in a timely manner from the Lands Titles Office. For strata units the articles of the strata corporation must be provided for the same reason.

The vendor/agent is now required to disclose various particulars if they are known (or the information has been obtained in time from the body corporate) and, if not disclosed, to explain what steps have been taken to obtain the relevant information.

Information about the financial status of a small business
The regulations have been amended in relation to the disclosure of financial information in the trading statement:

• Vendors who have been trading for less than three years must disclose how long the business has been trading;
• Information about the business must be substantiated (particularly where the business has been in operation for less than one complete financial year); and
• Where information relates to a part year only, then this must be disclosed to purchasers.

Fellow members of the National Tax and Accountants' Association Limited have been added to the list of qualified accountants who can endorse the statement.

Waiver of cooling-off period
A purchaser can waive his or her right to a cooling-off period. In order for the waiver to be effective the purchaser must first receive independent advice from a legal practitioner. The regulations have been amended to clarify this.

Name of the information report prepared by the Land Services Group
The Regulations list information that must be disclosed to prospective purchasers of land and businesses. Some of that information (but not all of it) is obtained from the Lands Services Group (LSG). The LSG provide the information in the form of a report which is often confused with the list of information prescribed in the regulations. To avoid confusion, the report from the LSG is now known as a Property Interest Report.

Particulars related to environment protection
The amendments include modifications to the existing environmental particulars and the information provided by both the vendor and the Environment Protection Authority (EPA). Previously vendors of land were required to indicate (by a yes/no answer) whether they were aware of certain activities on the land., for example, they had to indicate whether they were aware of any manufacturing activity that had occurred on the land. Where the vendor answered yes to any of the questions listed in the regulations, the purchaser was advised to seek further information from the vendor. The Regulations have been amended so that details of the relevant matters must now be disclosed up-front without the purchaser having to request the information.

Primarily, the amended questions responded to by the EPA have been included to accommodate the new site contamination provisions detailed in the Environment Protection (Site Contamination) Amendment Act 2007 which amended the Environment Protection Act, 1993 on 1 July 2009. The majority of these questions came into operation on 1 September 2009. The remaining questions, which provide details relating to current and expired environmental authorisations issued by the Environment Protection Authority, are scheduled to commence on 1 March 2010 and 31 August 2010 respectively.

A question has also been included for response by Local Councils relating to details of any development approvals for a commercial/industrial activity on the land or a change in land use of the land. This question will commence on 31 August 2010.

Service of a cooling-off notice
In relation to cooling off, it has been made clear that registered post is a valid method of service of the notice.

Disclosure of information on transactions related to land within the last 12 months
In relation to disclosure of information on transactions related to land within the last 12 months, disclosure requirements have been extended to include vendors who entered into a contract to purchase the land or who obtained an option to purchase the land within the last 12 months.

The final version of the regulations as amended by the variation regulations is available on the SA legislation website at
Land and business (Sale and Conveyancing ) Regulations 1995

The changes are made as each of the amendments commence operation.

Transitional provisions

Transitional period for the September 1 2009 changes to the vendor’s statements under sections 7 & 8 of the Land and Business Sale and Conveyancing) Act

It was foreshadowed during the process of preparing the amending regulations that some time should be allowed for transitioning from the old vendor’s statements to the new ones.

The transitional provisions are as follows:

Transitional provision relating to Part 4

1. 1. A vendor's statement for the purposes of section 7 of the Land and Business (Sale and Conveyancing) Act 1994 prepared before the commencement of Part 4 of these regulations will be taken to comply with the Land and Business (Sale and Conveyancing) Regulations 1995 as varied by Part 4 if the statement—
1. (a) was prepared not more than 2 months before the commencement of Part 4; and
2. (b) complies with the Act and regulations as in force—
   
   1. (i)  if prepared before the commencement of Part 3 of these regulations—immediately before the commencement of Part 3
   2. (ii) if prepared after the commencement of Part 3—immediately before the commencement of Part 4; and
3. (c) is accurate as at the date of service of the statement on the purchaser.

 
2. 2. A vendor's statement for the purposes of section 8 of the Land and Business (Sale and Conveyancing) Act 1994 prepared before the commencement of Part 4 of these regulations will be taken to comply with the Land and Business (Sale and Conveyancing) Regulations 1995 as varied by Part 4 if the statement—
1. (a) was prepared not more than 2 months before the commencement of Part 4; and
2. (b) complies with the Act and regulations as in force—
   1. (i) if prepared before the commencement of Part 3 of these regulations—immediately before the commencement of Part 3;
   2. (ii) if prepared after the commencement of Part 3—immediately before the commencement of Part 4; and
3. (c) is accurate as at the date of service of the statement on the purchaser.
    
3. 3. A reference in this clause to the date of service of a vendor's statement is, where a notice of amendment to the statement is served for the purposes of section 10 of the Land and Business (Sale and Conveyancing) Act 1994, a reference to the presumed date of service of the statement under that section.

Basically the effect of this provision is that:

• if a vendor’s statement was prepared during July 2009 and complied with the regulations as at 31 July 2009, or
• if a vendor’s statement was prepared during August 2009 and complied with the regulations as at 31 August 2009,

then it will be taken to comply with the regulations (provided that nothing besides the changes to the regulations has occurred to render the statement inaccurate).

A property interest report (formerly known as the section 7 statement) obtained before 1 September 2009 should not be used for the preparation of a vendor's statement on or after that date


 

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