Owners Corporation (2-lot Subdivisions) - Insurance and the Sale of Land Act 1962

Property Law: 23 March 2019

Section 11 of the Sale of Land Act 1962 states that a person cannot sell a lot affected by an owners corporation unless the vendor or the owners corporation has a current insurance policy in accordance with the Owners Corporations Act 2006 for any insurance required by that Act to be effected by the owners corporation.

Due to the compliance exemptions contained in section 7, for 2-lot subdivisions there are no requirements for reinstatement and replacement insurance or public liability insurance.

Therefore, it appears that a purchaser of land on a two lot subdivision could not rely on section 11(2) to avoid the contract where an owners corporation or vendor has not taken out insurance.