5 Prescribed requirements for rent-to-buy arrangements 2
6 Terms contracts 4
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Endnotes 5
1 General information 5
2 Table of Amendments 7
3 Amendments Not in Operation 8
4 Explanatory details 9
Version No.001
Sale of Land (Exemption) Regulations 2020
S.R. No. 13/2020
Version as at
1 March 2020
1 Objective
The objective of these Regulations is to prescribe for the purposes of the Sale of Land Act 1962—
(a) requirements for rent-to-buy arrangements for the purposes of section 29WA(b) of that Act; and
(b) the prescribed amount for terms contracts.
2 Authorising provision
These Regulations are made under section 17 of the Sale of Land Act 1962.
3 Commencement
These Regulations come into operation on 1 March 2020.
4 Definitions
In these Regulations—
rent-to-buy payment means—
(a) any deposit paid by or on behalf of a purchaser under a rent-to-buy arrangement for entry into that rent‑to‑buy arrangement; and
(b) any other payments made under that rent-to-buy arrangement by or on behalf of a purchaser, less payment of rent or any other amount for the occupation of the land; and
(c) if a payment described in paragraph (a) or (b) is held in a special purpose account established with an ADI, any interest earned on that payment;
sale deed means a contract—
(a) that provides for rent-to-buy payments to be made by a person; and
(b) which confers a right of that person to purchase residential land;
the Act means the .
Sale of Land Act 1962
5 Prescribed requirements for rent-to-buy arrangements
(1) For the purposes of section 29WA(b) of the Act, the prescribed requirements are—
(a) any contract relating to a rent-to-buy arrangement must be in writing; and
(b) every rent-to-buy payment received by the vendor from or on behalf of the purchaser must be offset against the purchase price of the property in reduction of the debt owed by the purchaser under the rent-to-buy arrangement; and
(c) the sale deed must clearly specify—
(i) when the purchaser will become entitled to the transfer of land or conveyance; and
(ii) that an option to purchase is exercisable at the sole discretion of the purchaser; and
(iii) when the sale deed will become unconditional; and
(iv) that rent-to-buy payments will be offset against the purchase price of the property in reduction of the debt owed by the purchaser under the rent-to-buy arrangement; and
(v) the purchase price; and
(d) every rent-to-buy payment received by a vendor must be paid within 7 days of receipt—
(i) to an estate agent or a legal practitioner or a conveyancer to be held in a trust account; or
(ii) into a special purpose account established at an ADI nominated by the vendor and the purchaser by whom or on whose behalf the rent-to-buy payment was paid; and
(e) the account specified in paragraph (d)(ii) must be designated for that rent-to-buy arrangement, and contain no money other than the rent‑to‑buy payment from each purchaser involved in that rent-to-buy arrangement; and
(f) money in the account specified in paragraphs (d)(i) and (d)(ii) is held on trust for the purchasers in that rent-to-buy arrangement until the sale deed becomes unconditional; and
(g) interest earned in the account specified in paragraph (d)(ii) is held on trust for the purchasers in proportion to the money paid into that account on behalf of each purchaser; and
(h) an account established under paragraph (d)(ii) may be drawn on only with the signature of both the vendor and the purchaser or the personal representative of the vendor or purchaser (as the case may be); and
(i) the purchaser may terminate the sale deed at any time before the day on which that contract becomes unconditional; and
(j) on termination of the sale deed before that sale deed becomes unconditional—
(i) the purchaser is relieved of all liability associated with the contract of sale or any other contract related to the rent‑to‑buy arrangement; and
(ii) the purchaser must be paid the total amount of rent-to-buy payments held in an account specified in paragraph (d) on trust for that purchaser within 60 days.
(2) In this regulation, a contract relating to a rent‑to‑buy arrangement does not include a lease in respect of residential land.
6 Terms contracts
For the purposes of the definition of prescribed amount in section 29AB of the Act, the prescribed amount is $750 000.
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Endnotes
1 General information
See www.legislation.vic.gov.au for Victorian Bills, Acts and current Versions of legislation and up-to-date legislative information.
The Sale of Land (Exemption) Regulations 2020, S.R. No. 13/2020 were made on 25 February 2020 by the Governor in Council under section 17 of the Sale of Land Act 1962, No. 6975/1962 and came into operation on 1 March 2020: regulation 3.
The Sale of Land (Exemption) Regulations 2020 will sunset 10 years after the day of making on 25 February 2030 (see section 5 of the Subordinate Legislation Act 1994).
INTERPRETATION OF LEGISLATION ACT 1984 (ILA)
Style changes
Section 54A of the ILA authorises the making of the style changes set out in Schedule 1 to that Act.
References to ILA s. 39B
Sidenotes which cite ILA s. 39B refer to section 39B of the ILA which provides that where an undivided regulation, rule or clause of a Schedule is amended by the insertion of one or more subregulations, subrules or subclauses the original regulation, rule or clause becomes subregulation, subrule or subclause (1) and is amended by the insertion of the expression "(1)" at the beginning of the original regulation, rule or clause.
Interpretation
As from 1 January 2001, amendments to section 36 of the ILA have the following effects:
• Headings
All headings included in a Statutory Rule which is made on or after
1 January 2001 form part of that Statutory Rule. Any heading inserted in a Statutory Rule which was made before 1 January 2001, by a Statutory Rule made on or after 1 January 2001, forms part of that Statutory Rule.
This includes headings to Parts, Divisions or Subdivisions in a Schedule; Orders; Parts into which an Order is divided; clauses; regulations; rules; items; tables; columns; examples; diagrams; notes or forms.
See section 36(1A)(2A)(2B).
• Examples, diagrams or notes
All examples, diagrams or notes included in a Statutory Rule which is made on or after 1 January 2001 form part of that Statutory Rule. Any examples, diagrams or notes inserted in a Statutory Rule which was made before 1 January 2001, by a Statutory Rule made on or after 1 January 2001, form part of that Statutory Rule. See section 36(3A).
• Punctuation
All punctuation included in a Statutory Rule which is made on or after
1 January 2001 forms part of that Statutory Rule. Any punctuation inserted in a Statutory Rule which was made before 1 January 2001, by a Statutory Rule made on or after 1 January 2001, forms part of that Statutory Rule.
See section 36(3B).
• Provision numbers
All provision numbers included in a Statutory Rule form part of that Statutory Rule, whether inserted in the Statutory Rule before, on or after
1 January 2001. Provision numbers include regulation numbers, rule numbers, subregulation numbers, subrule numbers, paragraphs and subparagraphs. See section 36(3C).
• Location of "legislative items"
A "legislative item" is a penalty, an example or a note. As from 13 October 2004, a legislative item relating to a provision of a Statutory Rule is taken to be at the foot of that provision even if it is preceded or followed by another legislative item that relates to that provision. For example, if a penalty at the foot of a provision is followed by a note, both of these legislative items will be regarded as being at the foot of that provision. See section 36B.
• Other material
Any explanatory memorandum, table of provisions, endnotes, index and other material printed after the Endnotes does not form part of a Statutory Rule. See section 36(3)(3D)(3E).
2 Table of Amendments
There are no amendments made to the Sale of Land (Exemption) Regulations 2020 by statutory rules, subordinate instruments and Acts.
3 Amendments Not in Operation
This version does not contain amendments that are not yet in operation.