Hansard debates

                        SALE OF LAND AMENDMENT BILL 2014
                           Statement of compatibility
Ms  VICTORIA  (Minister for Consumer  Affairs)  tabled  following  statement  in
accordance with Charter of Human Rights and Responsibilities Act 2006:
  In   accordance  with  section  28   of  the  Charter  of   Human  Rights  and
  Responsibilities  Act  2006, (the 'charter  act'),  I make  this  statement of
  compatibility with respect to the Sale of Land Amendment Bill 2014.
  In my opinion, the  Sale of  Land Amendment  Bill 2014,  as introduced  to the
  Legislative Assembly,  is  compatible  with human  rights  as set out  in  the
  charter act. I base my opinion on the reasons outlined in this statement.

  Human rights issues
  Human rights protected by the charter act that are relevant to the bill
  Property (section 20)
  Section 20  of the charter act provides  that a person must not be deprived of
  his or her property other than in accordance with law.
  Part 2 of the bill requires vendors  of  land  to disclose certain information
  about the land  to prospective purchasers  before entering into a  contract to
  sell  the  land,  and  enables  a  purchaser  to rescind a contract in certain
  circumstances.

  A purchaser may not rescind a contract where  a vendor  has acted honestly and
  reasonably and ought fairly to be excused for a failure  to  disclose required
  information, and where the purchaser is substantially in as good a position as
  if all the required disclosure had taken place.
  These provisions of the bill are relevant to property rights under section  20
  of the charter act as they restrict a person's capacity to dispose of property
  unless  certain  disclosures have  been  made, and give  a  purchaser under  a
  contract of sale rescission rights, in certain circumstances.
  However,  these provisions  are  not unreasonable  or  arbitrary, as they  are
  intended to address information imbalances  between  vendors and purchasers in
  property  transactions,  and  provide an avenue of  redress  in  circumstances
  where, for example, required disclosures have not been made.

  Accordingly,  property  rights  under  section  20  are  not  limited  as  any
  interference  with property rights  under the bill is neither unreasonable nor
  arbitrary and is in accordance with law.
   Hon. Heidi Victoria, MP
  Minister for Consumer Affairs
SALE OF LAND AMENDMENT BILL 2014
Second reading

  Ms VICTORIA (Minister for Consumer Affairs) -- I move:
  That this bill be now read a second time.

Speech as  follows incorporated into  Hansard in accordance  with  resolution of
house:
  The  bill  will  amend  the  Sale of  Land Act  1962 to  reform and  modernise
  Victoria's system  of  vendor  disclosure,  and make related and consequential
  amendments to the Owners Corporations Act 2006.
  The requirements of section 32 of the Sale of Land Act will be re-enacted with
  improvements  to  increase  efficiencies  in the  preparation  of  section  32
  statements,  improve  the readability of  section  32  statements,  and  bring
  greater  clarity  to,  and  refinement of,  existing  disclosure requirements.
  Redundant and outdated provisions in the legislation will not be re-enacted.

  The  amendments introduced by this bill will assist the government to meet its
  commitment to  achieve  significant red tape reductions of 25 per cent by July
  2014 by reducing the 

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 administrative compliance  requirements  associated  with  the  preparation  of
section 32 statements.
  Section 32 of  the Sale  of Land Act requires vendors selling land in Victoria
  to disclose  certain  information  about  the  land  for sale  to  prospective
  purchasers, through the provision of a section 32 statement.
  The original policy rationale for section 32 was to  improve  the  position of
  purchasers by increasing the amount of information available to assist them in
  the bargaining process. Requiring the vendor  to  disclose certain information
  to the purchaser  before the purchaser signs the contract of sale acknowledges
  the  potential  for  an  information  imbalance between  the  vendor  and  the
  purchaser, to the detriment of the purchaser.

  While prospective purchasers  can gather a  great deal of relevant information
  themselves by undertaking physical inspections of a property, such inspections
  may  not necessarily yield  all  the information  they  may need to  determine
  whether they are paying a fair price or, fundamentally, if the property is the
  right one for their needs.
  Lawyers and conveyancers, on behalf of their vendor and purchaser clients, are
  generally responsible for preparing and reviewing section 32 statements. These
  professionals, along  with the estate agents who sell properties,  have worked
  together  to build   a  mature and   successful  vendor disclosure system   in
  Victoria.
  However, in the 30 years since  its  introduction, section 32 has been amended
  many times, increasing the level of disclosure, as  well as the complexity and
  size of section 32 statements.

  As a result, the government conducted a red tape  reduction  review of section
  32 to seek  stakeholder  views on potential  areas for reform, principally  to
  alleviate  the administrative burden on vendors and purchasers and the lawyers
  and conveyancers who act for them.
  During consultation on these reforms, stakeholder bodies representing lawyers,
  conveyancers,  estate agents  and  owners corporations  managers highlighted a
  number of areas for potential reform,  and many of these stakeholder-initiated
  proposals are included in this bill.
  The  amendments to  be made  by the  bill  are estimated  to deliver  red tape
  reduction savings  by clarifying and simplifying the information that  must be
  disclosed,  updating  key aspects  to reflect  modern  conveyancing practices,
  reducing the size and number of statements required, and removing requirements
  that impose unnecessary delays in preparing section 32 statements.

  However,  it  is important  to  note  that the  amendments  will not  diminish
  necessary  protections  for  purchasers.  The review confirmed  the  value  of
  section 32  statements, but highlighted  the  need to refocus  its  content to
  information specific to the property for sale,  and  held  by  the  vendor  or
  obtainable from a third party.
  I will turn now to the detail of the proposed bill.
  The  bill re-enacts the provisions of  section 32 as division 2  of part II of
  the Sale of Land  Act,  thereby  giving vendor disclosure the proper status it
  should accord in Victoria's sale of land regime.
  Key features of the existing regime that provide protection to purchasers have
  been re-enacted.

  In particular,  the  requirement to  provide  the  section 32  statement  to a
  purchaser prior to a contract of sale  being  signed  has  been re-enacted, as
  have existing rights of rescission that may be relied upon by the purchaser in
  certain circumstances.
  Many  of   the  provisions  have  been  re-enacted  without  amendment,  where
  stakeholders  advised that the  current level of  disclosure is appropriate. I
  will not focus further on these unchanged aspects of vendor disclosure, except
  to  say  that  this  bill  has  provided  a  welcome opportunity  to  re-enact
  provisions of section 32 in a modern drafting style, for  example  by grouping
  re-enacted  requirements  under  key  themes,   to  improve  readability   and
  comprehensibility.
  Where  necessary,  provisions  have been re-enacted with amendments to improve
  clarity, codify existing industry practices and remove unnecessary red tape.

  Feedback  from stakeholders about current conveyancing practices are reflected
  in the bill, which consolidates all disclosure requirements into one statement
  and removes the requirement for a second section 32 statement and accompanying
  certificates and documents to be annexed to the contract of sale.
  The bill re-enacts existing  requirements to attach  evidence of the  vendor's
  title  to the  land for  sale to  the section 32  statement, but  has codified
  common practice  in relation  to land  under the  Transfer of Land Act 1958 by
  requiring a copy  of  the  register  search  statement  to  be attached to the
  section  32 statement. This requirement replaces the  current  requirement  to
  attach a copy of the certificate of title.
  Existing requirements to provide copies of plans for proposed subdivisions and
  amendments to  subdivided land have  also been re-enacted  with  amendments to
  remove outdated language and clarify the extent of disclosure required.

  The bill  simplifies and clarifies planning disclosure  requirements, ensuring
  that  section  32  requirements  keep  pace with Victoria's  current  planning
  system.
  The  bill tightens  disclosure  requirements for  --  among  other  things  --
  government notices, orders and approved  proposals affecting the land. Vendors
  will  now  only need  to  disclose  those documents  that  have  a present-day
  application to the  land.  They will not  be  expected to disclose  historical
  documents that may have once applied over the property, but which do  not have
  any continuing impact on the land.
  The  bill will also  specifically clarify the  requirements for disclosure  of
  land contaminated by agricultural chemicals or affected by livestock disease.

  The bill introduces  a new separate requirement  for vendors (or  their estate
  agent should they engage one) to make a due  diligence  checklist available to
  purchasers  when a  property is  first offered for sale if the land includes a
  residence or is land on which a residence could be constructed.
  Its introduction acknowledges and responds  to  stakeholder feedback that when
  purchasers commence  looking at  properties,  generic information  can  assist
  purchasers in making their own enquiries to find out more information in areas
  of particular interest to them.

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  The due diligence checklist  will be prepared by Consumer Affairs Victoria and
  made  available  on its website,  with  direct links  to  other  websites with
  specialist content.
  It  is anticipated that estate  agents  will  make  hard  copies  of  the  due
  diligence checklist  available  to potential purchasers at open for inspection
  events, and will provide  links from their websites to the website of Consumer
  Affairs Victoria, where it will be available.
  The bill also makes  amendments in relation  to the disclosure of  information
  about owners corporations at the point of sale.

  Firstly,  the  bill  increases  flexibility for vendors in  satisfying  owners
  corporation disclosure requirements by allowing  vendors  to  choose to either
  specify the required  information  in the section  32 statement, or provide  a
  copy of the current owners corporation certificate.
  This  will  replace   the   current  requirement  for  an  owners  corporation
  certificate to be  provided by a vendor whenever land is sold that is affected
  by an owners corporation, and is anticipated to deliver savings to vendors who
  take  an  active interest in  their  owners corporation and  have the relevant
  information in their  possession.  Vendors who do  not hold all  the  relevant
  information will  still  need to obtain  an owners corporation  certificate to
  satisfy their disclosure requirements.

  As it  is important  that there is no capacity for a  purchaser to  mistakenly
  believe that they are buying into an active and functioning owners corporation
  when in  fact  the opposite is true,  the  bill also makes  it  clear that the
  vendor will be expected to disclose in the section 32 statement when an owners
  corporation is inactive.
  Secondly, the  bill makes consequential  and related amendments  to the Owners
  Corporations Act, to enable  a separate review of  fees for owners corporation
  certificates to be undertaken.
  A  concern  raised  during the  review  was the current  inflexibility  of the
  prescribed fee for  owners corporation certificates.  The Owners  Corporations
  Act only provides for one  fee, with no capacity for the fee to  be varied for
  certificates of different sizes, complexity or urgency.

  As a result, it is proposed to reassess owners corporation certificate fees to
  allow the  current costs to  be  examined and differential  fees developed. To
  facilitate this, the  bill amends the Owners  Corporations Act to  improve its
  fee-making powers.
  The  bill also makes it an offence for  an owners  corporation to  charge more
  than   the  relevant  prescribed  fee  for  issuing  an   owners   corporation
  certificate.
  In concluding my remarks on this bill, I wish to acknowledge that stakeholders
  made very worthy contributions to the  review of  section 32 and, as a result,
  influenced the  development  of this bill.  The amendments introduced  by this
  bill aim to ensure that section 32 statements continue  to hold pride of place
  as a major source of protection for purchasers of land in Victoria.

  I commend the bill to the house.
Debate adjourned on motion of Ms GREEN (Yan Yean).
Debate adjourned until Thursday, 20 February.
Remaining  business postponed on  motion of Ms  ASHER  (Minister for Innovation,
Services and Small Business).