Changes to Property Agents and Motor Dealers Act 2000 - Further requirements for binding contracts

Amendments to the Property Agents and Motor Dealers Act ("PAMDA") and Body Corporate and Community Management Act ("BCCMA") were passed on 23 November 2005 which were aimed at enabling relevant contracts (ie those which are for the sale of residential property as defined under PAMDA) to be entered into using facsimile or email. These amendments introduce further compliance requirements which need to be satisfied in order to create a binding contract for the sale of residential land.

The amendments will commence on 1 December 2005 and all relevant contracts which have not been formed by that date (including those currently being negotiated or executed) will be subject to the new provisions.

In summary, the amendments to PAMDA dictate specific requirements for delivery and formation of contracts which vary depending on the manner of delivery of those contracts (eg by facsimile, email, post, etc). Given the complexity of the amendments.

Because the requirements for each of the methods are different, extreme care would need to be exercised if it were proposed to initially send the relevant contract by one method (eg. fax) and send the final executed contract to form the contract by another method (by email).

Importantly the effect of non-compliance not only results in the buyer being able to terminate the contract but also exposes the seller or the seller's agent responsible for the non-compliance to a maximum penalty of $15,000.

You should also note that contracts which are not relevant contracts (ie. residential) but are for lots subject to the BCCMA now require certain specific actions to be followed in relation to an information sheet to be given by fax or email. Failure to follow the requirements will mean the information sheet will be inappropriately given and a right of termination until settlement will arise.

Please feel free to contact us to discuss these amendments and their potential impact on your business at your convenience.