By Nafsika Starvaggi

6 August 2019

The Sale of Land Amendment Act 2019 (Vic) (the Amendment Act) was passed by the Victorian Parliament on 4 June 2019. The Amendment Act was introduced to Parliament on 21 August 2018, however its enactment was delayed by the intervening State election at the end of 2018.

The Act implements key outcomes of the Consumer Property Law Review’s examination of the Sale of Land Act 1962 (Vic) (the Act). The amendments aim to address ongoing issues in the Victorian property market, which the Government considers pose risks for consumers.

The Amendment Act has made a number of significant changes to the Act, which consumers and stakeholders within the Victorian property industry should be aware of. A summary of some key changes is as follows:

1. Sunset clauses – a developer’s ability to rescind residential off the plan contracts of sale is now restricted. This change applies retrospectively from 23 August 2018. For more info on this change, please see Part One: The Sun Sets on Developer’s Rights.

2. Increased vendor disclosure – in addition to the current requirements of section 32 of the Act, vendors and real estate agents must also now disclose “material facts” about a property to a purchaser (for example, a property’s past history as a drug laboratory or site of a homicide). It is an offence to ‘knowingly’ conceal any material fact. The Amendment Act authorises the Director of Consumer Affairs to publish guidelines on what is meant by “material fact,” which as of yet have not been published.

3. Greater protections for purchasers in land banking schemes –

(a) Vendors can only sell options in land banking schemes in accordance with section 29WH of the Act, otherwise purchasers have a right to rescind. Money paid by a purchaser for options must be held in trust by the vendor’s legal practitioner, conveyancer or licensed estate agent until the earlier of a plan of subdivision being registered or the date by which the option must be exercised.

(b) The maximum option exercise period is five years and this cannot be contracted out of.

(c) If a purchaser rescinds the agreement or the option exercise period expires, the purchaser’s money must be refunded.
These provisions do not apply to a land banking scheme administered by a registered managed investment scheme or a financial product issued by the holder of an Australian financial services licence.

4. Prohibiting certain ‘terms contracts’ and rent-to-by arrangements –

(a) Terms Contracts – vendors must not enter into terms contracts for the sale of residential land (other than agricultural land) for a price less than the amount prescribed in the regulations (which is not yet known).

(b) Rent-to-buy arrangements – rent-to-buy arrangements involve a purchaser taking possession of the property on a rental basis with an option to purchase the property at a future time. These arrangements are prohibited unless one of the parties is the Director of Housing or a registered housing association or the arrangements comply with guidelines yet to be issued by the Government.

It is an offence to arrange, broker, induce or advertise a terms contract or rent-to-buy arrangement in breach of these requirements.

Failure to comply could result in significant fines and potential jail time for vendors and third-party intermediaries.

The new laws on sunset clauses apply retrospectively from 23 August 2018, with all other amendments of the Amendment Act to be implemented by no later than 1 March 2020. We will monitor the implementation of the changes and provide a further update when they come into effect.


Please feel free to contact a member of our property law team to discuss these proposed amendments.


The material contained in this publication is meant to be informational only and is not to be construed as legal advice. Tisher Liner FC Law will not be held liable or responsible for any claim, which is made as a result of any person relying upon the information contained in this publication.

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