The complex document ordering, contract presentation and re-presentation requirements in PAMDA will be axed from October 1 but the monster still has a ferocious appetite.

The slayers have removed the current requirement for a buyer to be given a new warning statement every time there is a contract alteration during negotiations e.g. over price or settlement date.

But the new statutory language in section 368A is so cumbersome that it is sure to sprout new monster heads that swallow up innocent agents, buyers and sellers just as before:

  • Does the phrase “another proposed relevant contract form” include contracts not drafted using an ADL or REIQ form?
  • What about the term, “if the parties remain the same”? Will the addition of the words “as trustee for XYZ”, change the identity of the party necessitating a new warning statement?
  • And what of the expression “if the residential property… remain the same”? Will an alteration to the included fixtures (part of “residential property”) require a new warning statement?

The new section also does not extend to situations where the buyer prepares the contract but the seller amends. The buyer need not attach any warning statement if it prepares a contract but the seller and agent will breach the Act if they don’t attach one when giving the contract back to the buyer with amendments. In such cases, the buyer will still have termination rights even after signing the amended contract if there is no warning statement.

On a different point, one section which already has at least three differing interpretations among lawyers is section 364 (b) which deals with sending documents by fax. This section specifies that contract documents must be given (if sent by fax) “as near as possible to the same time having regard to the normal operation of fax machines”.

What does this expression mean? It could mean that it’s okay if the faxed documents are not actually received at the same hour, minute and second as long as they were sent in the same fax transmission. Or it could mean that it’s okay if they are sent 30 minutes apart if for example, the fax machine broke down during the first transmission.

What do you think?

Another PAMDA head that needs to be lopped relates to waiving cooling-off periods. Under section 366, the lawyer’s certificate must disclose any relationships with the seller or agent. However disclosure is insufficient for the certificate required under section 369A – for waiver of cooling-off. This puts agents, clients and solicitors in a position of uncertainty.

Does this mean that a solicitor who receives 10 referrals per year from the one agency or is a “preferred supplier”, is prohibited from actioning a cooling-off waiver? This uncertainty can easily be resolved by making the 369A requirements the same as for 366 or by providing a precise definition of “business relationship”.

Cooling-off periods (and the new 90 day termination-for-non-compliance window) run from the date of the buyer’s receipt of a copy of the signed contract. Currently, if a contract is sent by post, it is deemed to have been received by the buyer after two days. The two day deeming provision is eliminated in the new Act.

There is plenty of time before October 1 for the slayers to re-visit the wounded PAMDA monster to finish it off. There is sure to be a new generation of monster heads that sprout from the carcass anyway – ones that can’t be foreseen –  so let’s hope they take this opportunity to kill off the grotesque heads that are still staring us in the face.


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