2009 Conditions of Sale

15-Jun-10



The joint forms of Condition of Sale used by REIWA and the Law Society of Western Australia have been amended in and are now known as the 2009 Conditions of Sale

The main reason for the change is that there have been significant changes to legislation since 2002.

The most important changes are:


  1. Interest on the deposit.  The conditions now provide that interest on the deposit is payable to the buyer in some circumstances.  However interest on the deposit is not payable until settlement.
  2. Restricted Use - Where land is made subject to a classification by the Department of Environment and Conservation that it is of a restricted use, then the restricted use classification will remain on the land.  The land so sold will be subject to the restrictive use unless it unreasonably affects the proposed use or materially affects the value of the land. Where a residence has been constructed on the land the land will be sold subject to the restricted use classification. 
  3. Ready Willing and Able to Letter.  Where a seller gives notice before settlement date or within 3 business days after the settlement date that they are ready, willing and able to settle interest will be calculated from and including the original settlement date.  If the seller fails to give notice of the fact that he is ready, willing and able to settle then he is not entitled to interest under the conditions.
  4. Strata Title.  Changes have been made to the Strata Title provisions so extensive representations are made by the seller as to the state of the strata and various matters relating to the strata title.  An indemnity is given by the seller to the buyer covering any loss incurred by a buyer arising out of a misrepresentation or breach of warranty under clause 10.2 of the conditions. The buyer however has the right to terminate a contact where part V of the Strata Titles Act applies.  This Part relates to the information to be given to each buyer and the consequences of non-compliance.
  5. Sub-Division.  Under the old 2002 General Conditions and under the 2009 General Conditions where a contract relates to part of a lot (where there is a sub-division being undertaken) the contract is conditional on the following:

    1. An application for sub-division being lodged within 3 months of the contract date.
    2. An approval for sub-division being granted by the WAPC within 6 months of the contract date or such later longer period as is specified in the contract.The clause however has been amended to provide that where the Western Australian Planning Commission “(WAPC”) grants approval subject to a condition, the WAPC would have been treated as having granted approval, but if the condition imposed by the WAPC is not satisfied within the time specified in the contract then the contract will be terminated at midnight on the date when the period for approval by the WAPC expires.
    3. If the WAPC imposes a condition with respect to approval for sub-division which the party affected by the condition is unwilling to comply with, then the contact may be terminated by notice to the other. 

The General Conditions of a contract are applicable to straight forward housing sales.  Where there are more complex issues or business or other substantial contracts of sale being entered into then legal advice should be taken on the point before the contract is signed.




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