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CIVIL LAW (SALE OF RESIDENTIAL PROPERTY) AMENDMENT BILL 2021
EXPLANATORY STATEMENT
Overview
This Bill amends the Civil Law (Sale of Residential Property) Act 2003 (the Act) with respect to contracts for the purchase of an off-the-plan property. The Bill requires a seller to obtain a buyer’s consent before they end such a contract using a sunset clause. Otherwise, the seller will need to apply to the Supreme Court of the Australian Capital Territory to justify termination.
Clauses 1-3
Clauses 1 to 3 include formal provisions that name the Bill, specify the Bill’s commencement on the day after its notification, and identify the legislation the Bill proposes to amend.
Clauses 4-11
Clauses 4 to 11 make necessary changes to reconfigure the structure of the Act, part 2 and the organisation of definitions so as to accommodate new division 2.3 inserted by clause 12.
Clause 12
Clause 12 inserts new division 2.3 (Off-the-plan contract
for sale of unit),
New division 2.3 prevents a seller from unilaterally
rescinding an off-the-plan contract for the sale of a residential property that
is a unit (or proposed unit) in a units plan (or proposed units plan) on the
basis of a sunset provision in the contract.
The division also defines
the following key terms:
• off-the-plan
contract—as a contract for the
sale of residential property that is a unit in a units plan before the plan is
registered;
• unit to include a proposed
unit;
• units plan to include a proposed units plan.
Under proposed Section 19E (Notice of intention to rescind under sunset
provision), a seller proposing to rescind an off-the-plan contract under a
sunset provision must give each buyer under the contract at least 28 days’
notice in writing of the proposed rescission. The seller is permitted to rescind
only if each buyer under the contract consents to the rescission, or the Supreme
Court makes an order allowing the seller to rescind the contract if the court
considers rescission to be just and equitable.
Section 19F requires the court
to take into account a number of considerations when deciding whether rescission
is just and equitable, including — the terms of the off-the-plan contract,
whether the seller has acted unreasonably or in bad faith, and whether the unit
the subject of the contract has increased in value. Also, proposed section 19F
(2) (h) enables the Executive to prescribe by regulation any additional
considerations that the court must consider. The seller must
pay the costs of a buyer in relation to a proceeding for an order under this
section unless the court is satisfied that the buyer unreasonably withheld
consent to the rescission.
The proposed section does not limit any right
that a buyer may have to rescind an off-the-plan contract under a sunset
provision.
Clauses 13-24
Clauses 13 to 24 make necessary consequential changes to provisions of the Act including the adjustment or insertion of definitions in the dictionary.