In September 2021, I published an article highlighting the decision of His Honour Justice Darke in the matter of BP7 Pty Limited v Gavancorp Pty Limited [2021] NSWSC 265:
Put and Call Option Agreements in Residential Property Transactions.
In this matter, there were Put and Call Option Agreements for several apartments in a block in the Sydney suburb of Cronulla.
Section 66T(d) of the Conveyancing Act 1919 makes it clear that "there is no cooling off period in relation to a contract for the sale of residential property if the contract is made in consequence of the exercise of an option to purchase the property." (i.e. a Call Option).
The issue before the Court was whether a cooling off period applied in relation to contracts for sale of residential property that arose upon the exercise of a Put Option. For the reasons set out in his judgment, His Honour concluded that a cooling off period did apply in relation to the contracts for sale that arose upon the exercise of the Put Options in that case
There has now been a legislative response to this decision.
The Conveyancing (Sale of Land) Regulation 2022 ('2022 Regulation') commenced on 1 September 2022.
Regulation 17(3) of the 2022 Regulation provides that "section 66S of the Act does not apply to a contract made in consequence of the exercise of an option to compel the purchase of land".
This effect of this amendment is that there is no cooling off period for the sale of residential property made in consequence of a Put Option.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.