Law Reform Commission of Western Australia
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Project 1(III) - Protection for purchasers of home units

Project No. 1(III)

Commenced: 1972
Completed: 1973

The project was referred to the Committee as a result of an incident known as 'the Whatley Crescent case'. The incident involved a proprietary company engaged in a commercial endeavour to construct home units upon a parcel of land owned by the company but mortgaged to secure advances for the construction of the building. The company’s advertising brochures invited people to purchase home units in the building; however the purchase was not offered on typical terms. By agreeing to purchase a specified home unit, the purchaser automatically applied for a group of shares in the company and agreed to be bound by its memorandum and articles of association. Some purchasers paid, to the land agent acting on behalf of the company, the full amount owing under their agreements while others only paid deposits. The land agent paid this money to the company at its request. When the company subsequently defaulted in payment of the mortgage, the mortgagee sought to invoke its right to sell the land and building, leaving purchasers inadequately protected.

Terms of Reference

In 1972, the Committee was asked to consider whether the sale of home units should be subject to Part III of the Sale of Land Act 1970 (WA) or any other appropriate legislation.

Outcomes

The Acts Amendment (Strata Titles) Act 1985 gave full effect to the Commission’s recommendations.

Last updated: 31-Jan-2017

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