Recent amendments to the ACT unit titles law will unfortunately negatively impact unit title developments and private individuals selling residential units says Property Council of Australia ACT Executive Director Catherine Carter.
The ACT Government pushed through legislation on Tuesday night (August 26) with the intention of addressing a range of issues around the purchase of home units, including strengthening consumer protection.
The Property Council, while supporting the general intention of the Bill, had several concerns with the draft legislation, particularly some of the more onerous provisions which are likely to deter development, reducing supply (which will increase price) and, where a development does proceed, directly make it more expensive.
Property Council ACT Executive Director, Catherine Carter, said:
“The first problem with the new legislation is that sales contracts for units in new developments will now have to include extensive new disclosure materials. While that might not sound bad in theory, a developer will need a crystal ball to try to predict details such as the body corporate levies a buyer may be up for after completion.
“What is more concerning however is that buyers will now have a statutory right to cancel their sale contract in certain circumstances if the disclosure documents are incomplete or inaccurate. This creates a level of uncertainty for developers and development finance that could have a significant negative effect on the amount of multi-unit development in the Territory. This could in turn lead to increased costs and lead to further detrimental effects on housing affordability.
“Then there are the new statutory warranties. A seller of any unit, whether a developer or a private individual putting their unit on the market, must warrant certain things about the unit complex. For instance, the seller must now warrant that the records of the body corporate (which in most unit plans are managed by a body corporate manager) are essentially all up to date. How will the seller know?
“Again, the real concern is that if that warranty turns out to be incorrect, under certain circumstances the buyer can cancel their sale contract.
“There are already laws that require disclosure materials and warranties be provided for the sale of a unit and a stand alone house. The difference is that those laws do not grant the buyer a right to cancel their sale contract in the way the new unit title laws do. The new legislation has unfortunately introduced new inconsistency and uncertainty into the Canberra residential market,” Ms Carter said.
For further information contact:
Catherine Carter, Executive Director, 02 6248 6902 or 0412 330 079