REIWA Announcement 2022 Contract (O&A) & JFGC

6/22/2022
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Updates to the Joint Form and Offer and Acceptance
The 2022 General Conditions and the new contract for the sale of land have been released today.
The Offer and Acceptance has also been updated with a revised format that will be easier to use.
The amended finance condition permits the buyer to apply for finance through a lender or a mortgage broker. The mortgage broker has the ability to provide notification of finance approval, non-approval or rejection.
All forms that have referred to the 2018 General Conditions have also been updated to now refer to the 2022 General Conditions.
Explanation of amendments

The 2022 Revision of the Joint Form of General Conditions for the Sale of Land has been a suitable opportunity to revise REIWA’s standard Contract for the Sale of Land by Offer and Acceptance (“the O&A”).
The changes that require noting are:
Condition 1 -Subject to Finance
A Buyer can now make a Finance Application to either a Lender or a mortgage broker, which is defined as a holder of an Australian Credit Licence pursuant to section 35 of the Credit Protection Act or a credit representative pursuant to sections 64 or 65 of that legislation.
The mortgage broker can provide a written:
approval notice stating that finance approval has been obtained, or
non-approval notice advising that the buyer has been assessed and is unsuitable for a loan or that the finance application to a Lender has been rejected.
Currently only the Buyer has the ability to give the Approval Notice or the Non Approval Notice. The amended finance will permit either the Buyer, the Lender or the Mortgage Broker to provide these notices.
REIWA appreciates the concerns that that have previously been held with mortgage brokers providing verbal advice that a finance application has rejected. This concern has been resolved requiring the mortgage broker to place this advice in writing.
REIWA created a new form 125MB “NOTIFICATION IN RELATION TO FINANCE APPROVAL CLAUSE FROM BUYERS MORTGAGE BROKER”.
This form should be given to the buyer to pass to their mortgage broker.
Condition 2 – Acceptance of an Offer
This condition clarifies when a contract comes into effect. The current provision only refers to a seller accepting the buyer’s offer. Whereas it could be the buyer accepting a counter offer from the seller. The revised condition uses the wording “acceptance of an offer by one Party to the other Party”.
Spacing for defining Buyer and Seller
Provision has been made for the name and address of two buyers and sellers. There only needs to be one email address given for the serving and giving of notices.
Type of Buyer
Tick boxes have been provided to describe the Buyer as either “Sole owner”, “Joint Tenants” or “Tenants in Common”. If Tenants in Common, then provision has been made to provide the description.
Layout
The overall spacing and alignment of boxes has been improved. Of note there is more space for describing the Purchase Price, Settlement Date and Property Chattels.
Versions of the O&A
With the increased length of the finance condition and the effect on the layout, REIWA Council has resolved that the two page version of the O&A be discontinued.
The default length is three pages for residential, commercial and rural versions of the O&A. All versions follow the same layout.
REIWA Council noted that the majority of contracts are now prepared through REI Forms Live and the increasing trend to have forms signed electronically through DocuSign.
Rural O&A
The sale of rural land is often associated with the sale of multiple lots. Provision has been made for the description of three different lots.
JOINT FORM OF GENERAL CONDITIONS FOR THE SALE OF LAND
2022 REVISION
EXPLANATION OF AMENDMENTS
The Joint Form of General Conditions for the Sale of Land (the General Conditions) are jointly owned by the Law Society of Western Australia and REIWA.
The Law Society and REIWA have agreed upon changes and the latest revision will be knowns as the 2022 General Conditions.
99 per cent of the changes relate to changes in the Strata Titles Act that were introduced in 2020 and the introduction of the Community Titles Act 2018 in 2021. These are only relevant to the sale of strata titled.
Section 26 “Definitions and interpretation” has been amended so that all definitions relating to strata and community titles have been placed into a standalone section 26.2 “Definitions – Strata and Community Titles Schemes”. Section 26.1 defines that those terms that are not related to strata or community titles.
The annexure 195 “annexure of changes to the 2018 General Conditions caused by changes to the Strata Titles Act” is not used with the 2022 O&A.
As to the pandemic, REIWA will continue to make available to members the COVID-19 annexure that delays settlement in scenarios where a COVID-19 event prevents a Party’s ability to settle.
Section 9.3 has been amended to clarify what happens if the seller’s breach of a warranty unreasonably affects the proposed use of the property or materially affects the value of the property. In such scenarios, the buyer may exercise its rights pursuant to the contract or arising at law.

New JFGC’s and O&A
The AICWA is awaiting hard copies of the new Joint Form of General Conditions and Contracts of Sale (O&A’s), once we have them we will advise on the option to purchase online via AICWA.     

Sourece;22 June 2022 aicwa eNewsletter.

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