New South Wales Consolidated Acts

LAND SALES ACT 1964 - SCHEDULE 5

SCHEDULE 5

(Section 12 (1))

LAND SALES ACT 1964

ADVICE TO PURCHASERS

1.

Before paying a preliminary deposit or signing an instalment contract you should carefully read this notice and the notice headed “Particulars of Title”.

2.

If you have paid a preliminary deposit following agreement with the vendor of the land or the vendor’s agent to buy the land on terms (by an instalment contract), the vendor must within seven days after the deposit was paid either:

(a) send you a contract together with an undertaking by the vendor to refund to you an amount, not exceeding an amount stated in the undertaking, for the reasonable costs incurred by you in procuring advice on certain matters from your solicitor or conveyancer, or

(b) authorise the trustee to refund the preliminary deposit to you and send you a notice that the vendor is unwilling or unable to sign a contract.

3.

When you buy land by means of an instalment contract, it is usually not until you have paid all the instalments or in the circumstances mentioned in paragraph 6 (1) hereunder that you are entitled to have the land transferred into your name.

4.

The contract may become binding on you from the moment you sign it, whether you have paid a deposit or not. A contract is not necessarily a formal printed document. A series of letters, or even a receipt for a deposit, if it contains certain simple statements may legally evidence a binding contract. But a receipt which bears the words “subject to contract” or similar words does not generally evidence a binding contract.

5.

In determining whether or not you should pay a preliminary deposit before you sign an instalment contract or whether or not you should sign an instalment contract, you should make enquiries and satisfy yourself (after consulting your solicitor or conveyancer):

(a) whether the land described in the contract (usually by a lot number) is in fact the same as the land which you intend to buy,

(b) whether roads shown in plans of the estate are actually constructed and afford a trafficable access to a main road,

(c) whether water, gas, electricity, sewerage, or other services are available,

(d) whether the vendor is the full owner of the land so as to enable the vendor to transfer the full ownership to you when you have paid all the instalments and whether such ownership is subject to any mortgage or other prior charge or liability. A vendor whose title is an equitable one only, or is subject to a prior mortgage, charge or other liability is required to disclose such fact to you on the notice headed “Particulars of Title” handed to you before you pay a preliminary deposit or sign an instalment contract. If an outstanding equitable interest or any form of security (ie mortgage, charge or other liability) is disclosed you are referred to paragraph 1 above,

(e) whether the land is subject to a town and country planning scheme and, if so, whether the use to which you propose to put the land is permitted by that scheme.

6.

(1) If you purchase by an instalment contract, you are entitled, whether it is so provided in the contract or not, when you have paid 15 per cent of the purchase price or if you receive a notice that the vendor intends to mortgage or charge the land thus enabling your interest to be overreached, to have the land transferred to your name. You must, of course, sign a mortgage over the land in favour of the vendor for the amount outstanding and you must observe certain time limits and pay the costs of the transfer and mortgage. This puts you in a similar position to a purchaser for cash, as regards security of title.

(2) Subdivisions must be approved by the local council prior to the vendor or the vendor’s agent accepting any payment from the purchaser of a lot, and a deposit, if paid, must be held by the trustee appointed to protect your interests and the interests of all other purchasers in the subdivision. The name and address of the trustee is shown on the notice headed “Particulars of Title”. In addition, all instalments up to 15 per cent of the purchase money must be paid to the trustee. After the vendor and yourself have signed the contract and you have signed a written order authorising the trustee to do so, the trustee may pay out the moneys held by the trustee in accordance with that authority.

(3) Usually the title to the land in an instalment contract must be registered under the Real Property Act (“Torrens title”), or the vendor must have made application (a “primary application”) to bring the land under the provisions of the Real Property Act . However, these requirements do not apply in the case of subdivisions effected before 31st July 1964.

7.

Within one month of the date of the contract you should ensure payment of stamp duty thereon, otherwise you may become liable to pay a fine in addition to the normal stamp duty.

8.

As soon as you sign a contract, or if you have only paid a preliminary deposit and are buying on terms (by instalment contract) and before you are entitled to have the land transferred to your name, or if you do not take advantage of your right to call for a transfer (see paragraph 6 (1) above) you may still gain some protection of your interest by lodging a caveat if the land is under the Real Property Act or, if the land is included in a primary application, by registering your contract. If you consider taking these steps would be to your advantage, you should consult a solicitor.

9.

If you buy under an instalment contract and are unable to ascertain from the vendor or the vendor’s agent information relating to your purchase, or if you are dissatisfied with the information given by a vendor or the vendor’s agent, you may seek such information from the trustee for the purchasers.