Leverage has had some enquiries in recent times regarding what happens to a contract for sale of land exchanged without the required attachments. In particular, we’ve had a number of enquiries regarding what happens if the pool compliance certificate is not attached to the contract for sale of land.

Section 52a of the Conveyancing Act 1919 (CA) states that a contract must be prepared by the vendor for the purchaser prior to exchange. Section 52a of the CA provides that a contract must include prescribed documents. These documents are set out in the Conveyancing Sale of Land Regulation 2010.

A failure to have any of these attachments included means that a contract has not validly been entered into. In other words, if a contract has been signed and exchanged, without the prescribed documents, the contract is invalid.

The list of documents which must be attached to a contact include:

  1. A Section 10.7 Planning Certificate (Previously named Section 149 Certificate) for the land
  2. Sewer Diagrams from a recognised sewerage authority that purport to show the following:

(a)  the location of any sewer lines on the land upstream of the point of connection to the authority’s sewer main (including the point of connection),

(b)  the location of the authority’s sewerage infrastructure for the property downstream of the point of connection to the authority’s sewer main (including the point of connection).

  1. If the contract relates to land under the provisions of the Real Property Act 1900:

(a)  a property certificate, and

(b)  a copy of a plan for the land issued by the Registrar-General (except in the case of land that is the subject of a limited folio).

  1. Copies of all deeds, dealings and other instruments that are lodged with the Registrar-General or registered that are shown on the property certificate for the lot and that create (or purport to create) any of the following interests that burden or benefit (or purport to burden or benefit) the land or any part of the land, together with copies of all memoranda referred to in any such instruments:

(a)  easements,

(b)  profits à prendre,

(c)  restrictions on the use of land,

(d)  positive covenants imposed under Division 4 of Part 6 of the Conveyancing Act 1919.

  1. If the contract relates to land that comprises or includes a lot in a strata scheme (within the meaning of the Strata Schemes Management Act 2015) or a lot under a community plan, precinct plan or neighbourhood plan (within the meaning of the Community Land Development Act 1989), copies of:

(a)  all deeds, dealings and other instruments lodged with the Registrar-General or registered that are shown on the property certificate for the relevant common property or association property and that create (or purport to create) any of the following interests that burden or benefit (or purport to burden or benefit) the common property or association property or any part of that property:

(i)  easements,

(ii)  profits à prendre,

(iii)  restrictions on the use of land,

(iv)  positive covenants imposed under Division 4 of Part 6 of the Conveyancing Act 1919, and

(b)  all memoranda referred to in any such instruments.

  1. If the contract relates to land that comprises or includes a lot in a freehold strata scheme within the meaning of the Strata Schemes Development Act 2015:

(a)  a property certificate for the lot and the common property, and

(b)  a copy of the strata plan that shows the lot, and

(c)  a copy of any by-laws in force for the strata scheme.

  1. If the contract relates to land that comprises or includes a lease of a lot in a leasehold strata scheme within the meaning of the Strata Schemes Development Act 2015:

(a)  a property certificate for the leasehold estate in the lot, and

(b)  a property certificate for the leasehold estate in the common property, and

(c)  a copy of the strata plan that shows the lot, and

(d)  a copy of the registered lease of the lot and the registered lease of the common property, and

(e)  a copy of any by-laws in force for the strata scheme.

  1. If the contract relates to land that comprises or includes a lot in a development scheme within the meaning of the Strata Schemes Development Act 2015, a copy of the following documents that are registered under that Act:

(a)  the strata development contract,

(b)  any amendment of the strata development contract.

  1. If the contract relates to land that is subject to a strata management statement registered under the Strata Schemes Development Act 2015, a copy of the strata management statement and of any amendment of the strata management statement that is registered under that Act.
  2. If the contract relates to land that comprises or includes a lot (within the meaning of the Strata Schemes Development Act 2015) that is within a community scheme (within the meaning of the Community Land Development Act 1989):

(a)  the documents prescribed by item 6, and

(b)  a property certificate for the community property and any precinct property, and

(c)  a copy of the community plan, including a copy of the community management statement and any development contract registered with the community plan, and

(d)  if applicable, a copy of the precinct plan, including a copy of the precinct management statement and any development contract registered with the precinct plan.

  1. If the contract relates to land that comprises or includes a lot that forms part of a community scheme within the meaning of the Community Land Development Act 1989:

(a)  a property certificate for the lot and community property, and

(b)  a copy of the community plan incorporating the lot, including a copy of the community management statement and any development contract registered with the community plan.

  1. If the contract relates to land that comprises or includes a lot that forms part of a precinct scheme within the meaning of the Community Land Development Act 1989:

(a)  a property certificate for the lot, precinct property and community property, and

(b)  a copy of the precinct plan incorporating the lot, including a copy of the precinct management statement and any development contract registered with the precinct plan, and

(c)  a copy of the community plan incorporating the precinct scheme to which the lot relates, including a copy of the community management statement and any development contract registered with the community plan.

  1. If the contract relates to land that comprises or includes a lot that forms part of a neighbourhood scheme within the meaning of the Community Land Development Act 1989:

(a)  a property certificate for the lot and neighbourhood property, and

(b)  a copy of the neighbourhood plan incorporating the lot, including a copy of the neighbourhood management statement and development contract, and

(c)  if the neighbourhood scheme in which the lot is situated is within a community scheme:

(i)  a property certificate for the community property and any precinct property, and

(ii)  a copy of the community plan, including a copy of the community management statement and any development contract registered with the community plan, and

(iii)  if applicable, a copy of the precinct plan, including a copy of the precinct management statement and any development contract registered with the precinct plan.

  1. If the contract relates to land that is subject to a building management statement registered under the Conveyancing Act 1919, a copy of the building management statement, as in force for the time being.

(1)  If the contract relates to land on which there is situated a swimming pool within the meaning of the Swimming Pools Act 1992 to which that Act applies, a copy of one of the following in respect of the swimming pool:

(a)  a valid certificate of compliance issued under section 22D of that Act,

(b)  a relevant occupation certificate within the meaning of that Act and evidence that the swimming pool is registered under Part 3A of that Act,

(c)  a valid certificate of non-compliance issued under clause 18BA of the Swimming Pools Regulation 2008.

(2)  This item does not apply if:

(a)  the contract relates to a lot in a strata scheme (within the meaning of the Strata Schemes Management Act 2015) or in a community scheme (within the meaning of the Community Land Development Act 1989) and that strata or community scheme comprises more than 2 lots, or

(b)  the contract is an off the plan contract within the meaning of section 66ZL of the Conveyancing Act 1919.

  1. A notice that is in or to the effect of each of the following notices (unless the notice is printed in the contract) and that is legibly printed, in bold type, with the words shown in capital letters in the heading being at least 14 point, and the rest of the notice printed in letters at least 10 point:

IMPORTANT NOTICE TO VENDORS AND PURCHASERS

Before signing this contract you should ensure that you understand your rights and obligations, some of which are not written in this contract but are implied by law.

WARNING—SMOKE ALARMS

The owners of certain types of buildings and strata lots must have smoke alarms (or in certain cases heat alarms) installed in the building or lot in accordance with regulations under the Environmental Planning and Assessment Act 1979. It is an offence not to comply. It is also an offence to remove or interfere with a smoke alarm or heat alarm. Penalties apply.

WARNING—LOOSE-FILL ASBESTOS INSULATION

Before purchasing land that includes any residential premises (within the meaning of Division 1A of Part 8 of the Home Building Act 1989) built before 1985, a purchaser is strongly advised to consider the possibility that the premises may contain loose-fill asbestos insulation (within the meaning of Division 1A of Part 8 of the Home Building Act 1989). In particular, a purchaser should:

(a)  search the Register required to be maintained under Division 1A of Part 8 of the Home Building Act 1989, and

(b)  ask the relevant local council whether it holds any records showing that the residential premises contain loose-fill asbestos insulation.

For further information about loose-fill asbestos insulation (including areas in which residential premises have been identified as containing loose-fill asbestos insulation), contact NSW Fair Trading.

Let’s look at the Pool Fencing Regulations specifically. The pool compliance certificate is a prescribed document. Failure to attach the compliance certificate to a contract means that the contract is invalid. There is no alternative to this opinion.

We have seen contracts recently which have inserted a provision which discloses noncompliance. As we have noted previously, you can provide such disclosures for non-approved buildings. These disclosures are not relevant to a contract for sale of land. If you are not compliant with the pool fencing requirements, you cannot formulate a valid contract.

What does this mean? If you exchange a contract without a compliance certificate when you have a pool in your backyard, and even if you have disclosed this non-compliance, your contract can be rescinded by the purchaser at any time. Forget the cooling off period or any other requirements of the contract. If you do not have a compliance certificate, the purchaser can walk away from the contract without any penalties.

If an agent exchanges a contract without a pool compliance certificate and it becomes unconditional, whether it be at an auction or by private treaty, the purchaser can rescind the contract. This leaves both the agent and the solicitor vulnerable.

Importantly, remember that section 64(4) of the Property, Stock and Business Agents Act 2002 makes you, the agent, liable for any loss on a contract which you do not have an authority to exchange. Many people tell me that authority to exchange is not needed to exchange a contract at auction. Yes, they’re right. What they don’t tell you, however, is that the agent is liable for any losses if they do not have an authority to exchange.

As an agent, you should:

  • Ensure that all prescribed documents are attached to a contract before you exchange; and
  • Ensure you have an authority to exchange.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au