In response to our previous e-alert of 30 March 2012, we wish to clarify that a 'two-pronged' approach has been taken to the amendments of the Land Sales Act 1984 (LSA).
The first round of amendments that took effect on 15 February 2012 amended section 27(1)(b) of the LSA, and restricted a Buyer's right to avoid the contract for an off-the-plan residential sale in certain circumstances. In particular, if the developer has not provided a registrable transfer to the Buyer within the relevant time period (currently 3 and a half years), then the Buyer may be able to avoid the contract. However, the amendments now provide that the contract cannot be avoided by the Buyer where the delay in providing the registrable transfer is a result of the Buyer's default.
The benefit of this amendment for developers is that it prevents Buyers from bringing an action against them where delays in providing the registrable transfer are a result of the Buyer's default.
The second round of proposed amendments to the LSA will allow developers to state a sunset date for providing the registrable transfer of up to five and half years in the contract of sale, as compared to the current sunset date of three and a half years. Developers are currently required to make an application to extend this sunset date, up to a maximum of five and a half years. The proposed amendments alleviate the need for developers to make an application to extend the time period, thereby reducing administrative processes, costs and to some extent uncertainty.
This second round of amendments has not taken effect, but we are continuing to monitor the position, so watch this space for further information as it comes to hand.
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