Sales Team Alert – 22 November 2013
PAMDA out – POA in – soon!
On Wednesday the Property Occupations Bill was introduced to Parliament. It will, once it commences, replace PAMDA … thankfully…
What do you need to know
Transitional provisions – for any contracts signed while PAMDA is in force, they’ll continue to be subject to PAMDA
When will it start – This is yet to be determined, but we expect it to be within the next month or so. We’ll keep you posted.
Key Changes – pesky forms gone
- written direction – thankfully, removal of the need to direct buyers to the PAMDA warning statement, the Body Corporate And Community Management Act (BCCM) information sheet and the proposed relevant contract;
- Form 30c – the warning statement (Form 30C) is gone. Now the following words need to appear above where buyers sign their contracts:
The contract may be subject to a 5 business day statutory cooling off period. A termination penalty of 0.25% of the purchase price applies if the buyer terminates the contract during the statutory cooling off period. It is recommended the buyer obtain an independent property valuation and independent legal advice about the contract and his or her cooling off rights before signing
- What if the above words are not there, or in the wrong place?
Sensibly, if there’s a failure to include these new words or they’re in the wrong spot, there’s no right to terminate the contract. Instead, the seller or their agent commits an offence and is liable to a penalty of up to $22,000. So you’ve still got to pay attention, but more for your own purposes than for the sake of the contract!
- Counter offers – again sensibly, inclusion of the above words isn’t necessary for counter offers by a seller unless the particular property or buyer changes;
- Form 14 information sheet – the requirement to give a BCCM information sheet to the buyer in any sale of a lot or proposed lot in a community titles scheme has been abolished;
The Cooling off period – no change :
- still five business days after the buyer receives a copy of the contract of sale, but that copy must be ‘signed by both parties’ (so entering into contracts by exchange is not available – this is common practice in other states).
- It can still be waived and shortened, and at this stage there is no reference for a lawyer’s certificate any more, which is sensible.
- It’ll apply only to options and not the contract arising from it (assuming the parties are the same).
- It won’t apply to contracts now signed up within two business days after auction, as long as the ultimate buyer was a registered bidder at the auction – TIP: get your bidder registrations!
Refining other dumb definitions –
- Residential Property – Under PAMDA “Residential Property” was a messy definition. Should I use the residential contract? Or the commercial contract etc? The new one is nice and clear:
Residential property is real property that is used, or is intended to be used, for residential purposes but does not include real property that is used primarily for the purposes of industry, commerce or primary production.
Residential Purposes – it’s not defined, but all this means is that it would be given its ordinary meaning! The new definition will overcome the need to look at planning schemes to decide whether property could be used for residential purposes etc.
What about how it affects you as an agent?
There are a number of changes but these are the most topical for obvious reasons are:
- Statutory Commission abolished – commission will be deregulated – the sky’s the limit on residential property sales
- S 149 Notice abolished – these notices for non-residential vacant land (under s 149 PAMDA) are pretty rare in any case, but now they’re even more so!
Just as soon as we know when the Act has been passed, and comes into force, we’ll be in touch. In the meantime, call us if you’d like any more information.