10 Mar 2009

New information required in section 149 certificates

Buyers and sellers of land under a contract for sale or an option to purchase in NSW need to be aware of the new prescribed matter that must now be specified in section 149 certificates. On and from 27 February 2009 the section 149 certificate attached to contracts for the sale of land or options to purchase in NSW must include information about complying developments - otherwise the sellers face some serious consequences.

The Environmental Planning and Assessment Amendment (Complying Development) Regulation 2009 inserts into Schedule 4 to the Environmental Planning and Assessment Regulation 2000 a new matter to be specified in a section 149 certificate:

"Clause 3: Complying development

Whether or not the land is land on which no complying development may be carried out under the State Environmental Planning Policy (Exempt and Complying Development Codes) 2008 and, if no complying development may be carried out on that land under that Policy, the reason why complying development may not be carried out on that land."

Contracts (or options that must have a section 149 certificate attached or a contract attached that has that requirement) entered into on or after 27 February must have a section 149 certificate attached containing this information.

Failure to attach a certificate containing this information will have serious consequences:

  • the vendor or the grantor is in breach of warranty, allowing the purchaser or grantee to rescind (if certain other conditions are fulfilled); and
  • arguably, the vendor or grantor is in breach of the obligation to attach the certificate, in that it is not a section 149 certificate at all, which may also give the purchaser or grantee a right to rescind.

The Amending Regulation also now allows councils to issue planning certificates for the limited purpose of identifying whether or not the land the subject of the certificate is land on which complying developments may be carried out.

While it might seem that these limited certificates could therefore be used to supplement a section 149 certificate that is silent on complying developments, we consider that this is an unwise thing to do in light of the NSW Department of Planning's recommendation that councils put a notation on these limited certificates stating that they are not to be relied on for the purpose of an annexure to a contract for sale of land under the Conveyancing Act 1919.

As a result, vendors in NSW should now review any contracts for the sale of land, or options to purchase, awaiting exchange, to ensure that a section 149 certificate containing the new required information is attached.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.