ASIC Corporations (Real Estate Companies) Instrument 2026/99

The instrument directly affects vendors who are owners of eligible shares in real estate companies and who wish to sell those shares without preparing a disclosure document under Chapter 6D. It affects licensed real estate agents who act for such vendors in relation to the sale of eligible shares, provided they comply with the pre-provision written disclosure required by paragraph 7(2)(b). It also affects any person, whether or not licensed, who provides general advice limited to a valuation of eligible shares or of the underlying property. Indirectly, the instrument affects purchasers of such shares, because the conditions require the draft contract to contain specific warranties, title particulars and annexures that become contractual rights enforceable between vendor and purchaser. Directors of real estate companies are affected because vendors must make reasonable enquiries of them before giving the warranty required by subparagraph 7(1)(e)(i). Real estate industry bodies, conveyancers and solicitors who prepare contracts for the sale of shares in these companies must ensure that the documentation meets the precise requirements of paragraphs 7(1)(c) to (g). The Australian Securities and Investments Commission is affected as the maker and administrator of the instrument, and State and Territory real estate licensing authorities remain responsible for the conduct of licensed real estate agents who rely on the relief.

Vendors who rely on subsection 7(1) must ensure that the offer is made by or on behalf of the vendor, that a copy of the draft contract is publicly available at the time of the offer, and that the draft contract contains the particulars, essential terms, warranties and annexures specified in paragraphs (c) to (g). The warranty concerning liabilities, defects, external administration and pending proceedings must be given after the vendor has made reasonable enquiries of the directors. Purchasers obtain corresponding rights to make requisitions on title and to receive the listed documents annexed to the contract. Licensed real estate agents who rely on subsection 7(2) must provide the two prescribed written disclosures before they give any general advice or deal in the shares. Valuers who rely on subsection 7(3) have no additional duties beyond ensuring that the advice they provide is confined to a valuation. The instrument confers no positive rights on any person; it merely removes the obligation to comply with the identified provisions of the Act when the stated conditions are met. Failure to satisfy any condition means the exemption is unavailable and the ordinary regulatory obligations resume.

The instrument itself creates no penalties. If a person purports to rely on the exemption but fails to satisfy one or more of the conditions in section 7, the exemptions do not apply and the person may contravene Parts 6D.2 or 6D.3 or subsection 911A(1) of the Corporations Act 2001. Contravention of those provisions attracts the civil and criminal penalties prescribed by the Act, including potential orders for compensation, injunctions and, in the case of unlicensed financial services, criminal sanctions. ASIC retains its full enforcement powers under the Act in respect of any conduct that falls outside the exemption. Because the conditions are expressed as prerequisites to the exemption rather than as standalone obligations, a breach of a condition does not itself constitute a contravention of the instrument; it simply removes the shield that the instrument would otherwise provide. The repeal provisions in section 8 and Schedule 1 have no direct enforcement consequences.

The instrument is made under the specific exemption powers in subsections 741(1) and 926A(2) of the Corporations Act 2001 and operates by disapplying Parts 6D.2, 6D.3 and subsection 911A(1) in the circumstances it describes. It does not amend the Act and has no effect on any other provision of the Corporations Act or the Corporations Regulations 2001. The definition of declared financial market in section 6 refers to section 9D of the Act and the transitional provision in section 1705F. The requirement that a licensed real estate agent disclose the absence of an Australian financial services licence and the governing effect of State or Territory real estate licensing laws creates an explicit interface with those licensing regimes. The instrument does not engage the related corporations provisions of the Corporations Act or any of the other Acts referenced in the retrieval context, such as the Wool Services Privatisation Act 2000 or the Australian Industry Development Corporation Act 1970. It leaves untouched the general prohibition on offering financial products without a licence and the general disclosure obligations that apply to offers that do not meet the conditions in section 7.

The instrument replaces the regime previously contained in ASIC Corporations (Real Estate Companies) Instrument 2015/1049, which is repealed in its entirety by item 1 of Schedule 1. It also repeals the company-specific relief previously granted to 8 Daphne Street Botany Ltd by the 2017 instrument. The new instrument commences on the later of the day after registration or 1 April 2026 and itself sunsets at the start of 1 April 2031. These dates establish a five-year operational window. The text of the instrument records no further transitional provisions or savings for offers made before commencement. The structure of the conditions in section 7 is substantially the same as the predecessor regime, with the addition of an express requirement that the draft contract be publicly available at the time of the offer and the inclusion of the specific repeal of the 2017 company instrument. No other legislative changes are recorded in the instrument.

The instrument contains no reference to any court proceedings, challenges or controversies. Its conditions, particularly the warranty in subparagraph 7(1)(e)(i) that requires the vendor to have made reasonable enquiries of directors and the requirement in paragraph 7(1)(f) that the purchaser may make requisitions other than in respect of matters fully disclosed and identified as acceptable, are expressed in language that may require judicial interpretation in future disputes between vendors and purchasers. The distinction between general advice and other forms of financial product advice, which is central to the relief for real estate agents and valuers, remains governed by the definitions in the Corporations Act and has not been altered by the instrument. No decided cases are named in the instrument or in the related retrieval context.

Practitioners must note that the exemption for vendors is lost if any single condition in subsection 7(1) is not satisfied; there is no substantial compliance safe harbour. The warranty concerning liabilities and defects must be given after reasonable enquiries of the directors, yet the instrument provides no guidance on the scope of those enquiries. The requirement that the draft contract be publicly available at the time of making the offer may be difficult to satisfy where marketing occurs through private channels before a formal contract is prepared. Eligible shares exclude any shares that confer an interest in a time-sharing scheme, so companies that operate even partially on a time-share basis fall outside the relief. The definition of real estate company is exhaustive; companies that do not fit one of the four listed categories, including certain community title or company title entities in other jurisdictions, receive no relief. Licensed real estate agents must give the two prescribed disclosures in writing before providing any general advice or dealing services; oral disclosure or disclosure after the fact is insufficient. Valuers may rely on subsection 7(3) only when the advice relates exclusively to a valuation; any additional commentary on the merits of the investment removes the exemption. The instrument sunsets on 1 April 2031, so any reliance after that date will require a fresh instrument or application for individual relief.

To rely on the vendor exemption, a person must prepare a draft contract for the sale of eligible shares that meets every requirement in paragraphs 7(1)(c) to (g). The contract must identify the area or areas to which the shares relate, give title particulars of the property and any affecting interests, state the occupancy and usage rights, contain the essential term that the purchaser will become the registered holder and that the company's title will be unencumbered except as disclosed, include the three-part warranty concerning liabilities, external administration and pending proceedings, permit requisitions on matters not fully disclosed and identified as acceptable, and have annexed current title documents and the company's constitution. A copy of that draft contract must be publicly available when the offer is made. Licensed real estate agents must confirm that the offer satisfies subsection 7(1) and must deliver the two written disclosures set out in paragraph 7(2)(b) before commencing any advice or dealing activity. Persons providing valuation advice must confine their communication to the valuation itself and must not provide any other general advice about the shares. All parties should retain records demonstrating satisfaction of the conditions, including evidence of the enquiries made by the vendor and copies of the disclosures given by agents. Because the instrument is due to be repealed on 1 April 2031, compliance programs should include a sunset review date well before that time.