Overview
When a vendor sells land in New South Wales, the contract does not only contain what is typed into it. By operation of section 52A(2)(b) of the Conveyancing Act 1919 (NSW), a vendor is deemed to have included in the contract the terms, conditions and warranties prescribed by regulation. Those prescribed warranties are set out in Schedule 2, clause 1 of the Conveyancing (Sale of Land) Regulation 2022 (NSW) (CSLR). They apply as at the date of the contract, except to the extent the relevant matter is disclosed in the contract.
This article summarises the key statutory warranties, explains the practical ramifications of breach (including the purchaser’s limited right to rescind under CSLR clause 21), and sets out practical steps vendors can take to reduce the risk of breach.
The statutory vendor warranties (CSLR Schedule 2, clause 1)
The table below sets out the main warranties and common risk areas.
| Warranty | What is warranted | Common trip hazards | How to avoid breach (practical steps) |
| (a) No adverse affectation | The land is not subject to an adverse affectation. | Pending or existing authority actions not identified; incomplete enquiries; vague disclosures that do not clearly alert a purchaser. | Run a pre-sale ‘warranty audit’; check council/authority correspondence; disclose with sufficient specificity and, where appropriate, attach supporting notices. |
| (b) No recognised authority sewer within the land | The land does not contain part of a sewer belonging to a recognised sewerage authority. | Sewer diagrams obtained but not reviewed; confusion between authority assets and private drainage; infrastructure easements overlooked. | Obtain and review sewer service diagrams early; if an authority sewer is within the land, disclose clearly and consider attaching an explanatory plan reference. |
| (c) Planning certificate specifies required EP&A matters | The planning certificate attached to the contract specifies the status of the land in relation to the matters set out in Schedule 2 of the Environmental Planning and Assessment Regulation 2021 (NSW). | Outdated or incomplete planning certificate; missing pages/annexures; incorrect certificate attached at exchange. | Order a fresh planning certificate close to listing; confirm it is complete; implement strict contract-pack version control before exchange. |
| (d) Building/structure risk: no basis for upgrading/demolition order OR building information certificate issued | Either (i) there is no matter relating to a building/structure on the land included in the sale that would justify an upgrading or demolition order, or (ii) if there is such a matter, a building information certificate has been issued in relation to the building/structure since the matter arose. | Unapproved works; structural/non-compliance issues; council complaints; late discovery just before completion. | Investigate compliance history early; obtain advice on whether a building information certificate is appropriate; rectify/regularise works where feasible; make specific disclosures rather than generic ‘as is’ wording. |
| (e) Positive covenant charge risk (section 88F) | If the land is burdened or purports to be burdened by a positive covenant imposed under the Conveyancing Act, Part 6 Division 4, no charge is payable under section 88F in relation to the land. | Positive covenant exists but payable charges are not checked; incomplete review of title instruments; assumptions about liability. | Review title and registered instruments carefully; make targeted enquiries as to whether any charge is payable; resolve/discharge any payable amount or disclose precisely. |
| (f) No annual coastal protection services charge | The land is not subject to an annual charge for the provision of coastal protection services under section 496B of the Local Government Act 1993 (NSW). | Coastal charges not identified; reliance on assumptions; incomplete council enquiries. | Confirm via council searches/certificates; if an annual charge applies, disclose expressly in the contract. |
What happens if a statutory warranty is breached?
A breach of a prescribed vendor warranty does not automatically give a purchaser a general right to damages. Instead, the CSLR provides a purchaser with a limited right to rescind the contract in defined circumstances (CSLR Part 5, clause 21).
The rescission right is conditional. In broad terms, a purchaser must satisfy all of the following:
- There was a failure to disclose the relevant matter in the contract.
- The purchaser was unaware of the matter as at the date of the contract.
- The purchaser would not have entered into the contract had they been aware of the matter’s existence.
- If rescission is sought for breach of the building-related warranty (Schedule 2 clause 1(d)), additional conditions apply relating to whether a building information certificate has issued since the relevant contract or option date.
Because all criteria must be satisfied, disputes often focus on the quality of disclosure, what the purchaser knew (or should be taken to know) at exchange, and whether the matter was truly deal-breaking.
Practical ramifications for vendors
Even though the prescribed remedy is framed as a limited rescission right, the commercial impact can be significant. Rescission claims frequently arise late in the transaction (often close to completion), creating time pressure and leverage.
- Deal collapse risk (and the need to re-market the property).
- Delay and transaction costs, including extended settlement management and dispute correspondence.
- Renegotiation leverage for purchasers, even where the vendor disputes the rescission entitlement.
- Reputational issues for vendors and agents, particularly in repeat-player markets.
How to avoid breach: a practical compliance playbook
Because the warranties apply ‘except as disclosed in the contract’, risk is best managed through early investigation, clean document packs, and specific disclosure.
1. Treat the statutory warranties as a pre-exchange checklist
Before listing (or at least before exchange), run each warranty as a checklist item. If anything is uncertain, obtain the relevant searches and documents early so there are no last-minute surprises.
2. Order the right searches and read them carefully
Many issues arise not because documents were missing, but because the parties did not interpret what the documents revealed (for example, authority sewer infrastructure, restrictive instruments, or planning notations).
3. Disclose specifically (generic catch-alls are risky)
Where a matter must be disclosed, the disclosure should clearly describe what the issue is, how it affects the land, and where it appears in the annexures or certificates. Vague ‘as is’ or ‘subject to all matters revealed’ style wording may not adequately disclose the relevant issue.
4. Treat building risk as a special category
If there is any plausible exposure under the building-related warranty, obtain advice early on compliance history, potential council order risk, and whether a building information certificate is appropriate. Where feasible, regularising works before sale may reduce both legal risk and buyer friction.
5. Lock down version control for the contract pack
Use a single final execution pack of the contract and annexures and avoid last-minute swaps that accidentally omit pages or attach an outdated certificate. Keep a record of exactly what was provided to the purchaser before they signed.
Key takeaway
In NSW, statutory vendor warranties are implied into land sale contracts by law. Vendors reduce exposure by running a disciplined pre-exchange process: investigate early, attach the correct documents, and disclose clearly and specifically where required.