Question
of the week
Question of the week

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31 August 2017

What if ...

Sale, Purchase, Mortgage, Lease
Victoria

Asked

Off the plan terms contracts prohibited

Is there any prohibition against an off the plan terms contract by reason of multiple payments?

A developer proposes to sell apartments off the plan in which a 10% deposit is payable on signing, with two further 10% instalments at agreed intervals. As long as the 2nd and 3rd payments are expressed as instalments and not part of the deposit, and the vendor gives the additional vendor's statement required for terms contracts, is there any problem?

Answered

Thank you for the question.

Section 9AA of the Sale of Land Act 1962 prohibits your proposal. See subsection (6):

In this section (except subsection (1)(b)) and section 9AF, “deposit moneys” in relation to the sale of a lot includes any moneys which are part of the purchase price received by the vendor or on behalf of the vendor before the purchaser becomes entitled to a transfer or conveyance of the lot.

Nice try, no cigar.

Regards

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