There has been a growing trend of so-called ‘mum and dad’ investors using companies as vehicles for owning property.
Under the old legislation, anybody buying property through ‘bodies corporate’ (or as a company) were automatically precluded from being able to use a cooling off period to make sure they are making the right decision.
For larger corporations and companies this does not pose a problem because they typically have teams of advisors to help plan and execute their purchases.
However, for people with less experience in real estate, recent changes to the law are quite important.
More thoughtful legislation better for all
The way I read the rationale for the new provisions is that legislators have wanted to make sure smaller investors get two days to think about their buying decision if they want it.
This is not a free-for-all but rather a very careful retuning of the law.
As of January 1 this year, 2014, bodies corporate get access to cooling off provisions if they meet the following criteria:
- They are buying residential land
- Such land is restricted to having up to two places of residence, or vacant land legally able to have a residence built on it
- Or they are buying a single community lot or strata unit, again for residential purposes
- The land is no bigger than 2.5 ha
At its heart, this provision is there to protect smaller companies or ‘mums and dads’ who are buying property as an investment option.
A trusted conveyancer is a valuable friend
As always, build your relationship with a professional conveyancer as early as possible on your property buying journey, to make sure Is are dotted and Ts are crossed to keep your investment safe.
This is because the use of the term ‘residential’ has very strict meanings within the residential land within the Land and Business (Sale and Conveyancing) Act 1994, and your conveyancer will be someone who should be well aware of that and able to answer your questions as you survey the market.
