Disclosure of works under the Sale of Land Act
Are you aware of your ongoing obligations of disclosure as a seller of property in Victoria?
The Sale of Land Act 1962(Vic.) imposes significant requirements on a vendor – typically, a property developer - selling ‘off-the-plan’ under a ‘prescribed contract’[1] for sale of a lot on an unregistered plan of subdivision to notify a buyer of any works affecting the natural surface of the land in the lot or of any land abutting that[2].
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The Sale of Land Act 1962(Vic.) imposes significant requirements on a vendor – typically, a property developer - selling ‘off-the-plan’ under a ‘prescribed contract’[1] for sale of a lot on an unregistered plan of subdivision to notify a buyer of any works affecting the natural surface of the land in the lot or of any land abutting that[2].
Section 9AB (2) relevantly requires, among other things, that works so affecting the land “which have not been disclosed in the contract for sale” must be disclosed to the purchaser, as soon as practicable, providing details of any works “which to the vendor’s knowledge –
(a) have been carried out on that land after the date of the contract but before registration of the plan of subdivision; or
(b) after the date of the contract and before..registration of the plan of subdivision have been commenced…. or are proposed to be carried out on the land.”
These requirements were the subject of judicial consideration by the Supreme Court in the recent case of Asia Digital Investments Pty Ltd v Mara Dextra Pty Ltd [2023] VSC 565, and indeed compliance with them was determined to be quite strict and demanding.
In Asia Digital Investments, the plaintiff purchaser alleged that the defendant vendor failed to comply with its obligation to notify the purchaser of surface level works in the development of a new adjacent road. The impact of the surface level works was to raise the height of the road relative to the lot between 1.5 and 2.5 metres and require a planned dwelling to be raised by at least a metre in turn.
The vendor claimed that sufficient disclosure was made by attaching plans which referenced the surface level works (but did not explicitly reference their impact) in emails sent to the builders and architects engaged by the purchaser – but, significantly for the outcome of the case, not the purchaser or the purchaser’s agent, both of whom were specifically nominated under the contract for sale for the purpose of notice to the purchaser.
The purchaser submitted that it should not have to treat documents sent to its agents as a ‘treasure map’ to locate the relevant disclosure. It also argued that the continuing mandatory nature of the obligation meant any disclosure should be explicit and addressed to the purchaser’s nominated contact details for notice under the contract.
Finding against the vendor, the Court held that the vendor was required to explicitly disclose the surface level works and their impact to the purchaser’s nominated address on the contract. The Court also reaffirmed that the disclosure was continuous and ongoing and should be undertaken as soon as the likely impact of proposed surface level works was known, not after the works had been completed or the impact certain.
Finally, the Court held that any disclosure should be express, and draw the attention of a purchaser to the impact of the works and the reason the disclosure is being provided.
The Sale of Land Act imposes these and many other kinds of obligations with a distinct consumer protection focus. It is important to seek qualified legal advice if you are a developer engaging in significant surface level works, or if you are a purchaser of land that is in a new and evolving landscaping backdrop.
Contact Dale and the team at Errard Legal for assistance and advice in matters related to property and construction disputes at info@errardlegal.com.au
[1] Sections 9AA (1) & 9AA(7)
[2] Section 9AB (2)