09 November 2006
Smoke alarms - obligations for real estate vendors
Our Bartier Perry Property Bulletin in May this year commented on the requirement for vendors to attach to contracts a statement that any building on the land complies with the obligation to install smoke alarms. Vendors no longer need to make that statement but all contracts for sale of land exchanged on or after 1 December 2006 must include an additional warning notice.
The New Conveyancing Regulation
The Conveyancing (Sale of Land) Amendment (Smoke Alarm Notices) Regulation 2006 was published in the Government Gazette of 27 October 2006 and takes effect from that date. The regulation:
- removes offences associated with vendors attaching incorrect smoke alarm statements;
- removes the right of purchasers to rescind contracts where smoke alarm statements were required to be made but were not attached to contracts;
- requires from 1 December 2006 that contracts contain a warning notice advising the parties of the obligation on the owners of certain buildings to install smoke alarms (or in certain cases heat alarms).
The Warning Notice
The wording and format of the warning notice is spelt out in the Regulation as follows:
"On or after 1 December 2006, a notice in or to the effect of the following (unless the notice is printed in the contract), being a notice that is legibly printed, in bold type, with the words "WARNING" and "SMOKE ALARMS" in capital letters at least 3 millimetres high, and the rest of the notice printed in letters at least 1 millimetre high:
The owners of certain types of building and strata lots must have smoke alarms (or in certain cases heat alarms) installed in the building or lot in accordance with regulations under the Environmental Planning and Assessment Act 1979. It is an offence not to comply. It is also an offence to remove or interfere with a smoke alarm or heat alarm. Penalties apply."
The whole of the notice should be printed in bold rather than just the words WARNING and SMOKE ALARMS.
The smoke alarm statements were required in contracts for the sale of certain types of buildings only. The amendments require that the warning notice must be included in all contracts for sale irrespective of the type of property being sold.
As noted in our earlier Bartier Property Bulletin the effect of not attaching the smoke alarm statement would have been to give purchasers another possible ground to walk away from recently exchanged contracts. Repeal of the legislation is welcomed in that respect.
It is doubtful inclusion of the warning statement in contracts will have the desired effect of ensuring smoke alarms are installed in buildings where they are required.
Where to From Here
From 1 December 2006 the warning notice is a prescribed document for the purposes of s52A(2) of the Conveyancing Act 1919. The remedy available to a purchaser if the vendor fails to include prescribed documents is rescission of the contract by notice in writing served on the vendor within 14 days from the making of the contracts.
The Law Society has informed us that the printed form of the contract for sale will be amended in near future to incorporate the prescribed warning notice. In the meantime solicitors should ensure that contracts exchanged on or after 1 December 2006 include the warning notice either as a stand alone document or part of the additional clauses of the contract.
Clients should be aware the new conveyancing regulation does not amend the requirements contained in the Environment Planning & Assessment Act 1979 for owners of certain buildings to ensure smoke alarms (or in certain cases heat alarms) are installed.
For further information regarding the requirement to install smoke alarms visit www.planning.nsw.gov.au or telephone the Department of Planning's Smoke Alarm Helpline on 1300 858 812.