Buyers who procure an off-the-plan property will now be shielded from sunset and development-delay clauses—this owing to a law passed in the Legislative Assembly Wednesday.
The Civil Law (Sale of Residential Property) Amendment Bill 2021 was tabled in November after mounting complaints from buyers whose off-the-plan contracts were rescinded earlier in 2021.
A sunset clause or development clause is a clause that permits developers to revoke a contract if specified time frames are not achieved, leaving many purchasers at risk and out of pocket.
According to this new legislation, developers will be empowered to act on the clauses to rescind a contract only with buyer consent or if they’re allowed by an order of the ACT Supreme Court.
The developer must grant 28 days written notice to the purchaser and must disclose the reason the contract should be revoked. If the buyer disagrees, the developer may procure an order from the Supreme Court sanctioning the recission.
Should the developer request an order via the Supreme Court, the court will consider the impact that the revoked contract will bear on both the purchaser and seller. The developer will be responsible to pay our costs to the buyer unless the buyer had unreasonably denied their consent.
The wave of developers rescinding contracts has produced intense concern for certain buyers, and undermining faith in the off-the-plan property purchase market, stated ACT Attorney-General Shane Rattenbury.
The housing market remains tension-wrought for buyers, and it is frequently first-home buyers examining off-the-plan purchases. It was valuable to act quickly to address these worries and protect consumers from rescissions happening in bad faith.
This law was proposed in November, and has been in effect since November 9 to “protect buyers and prevent opportunistic rescissions” between presentation and passing of amendments, Rattenbury stated.
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