The Supreme Court gave a landmark decision in favour of off-the-plan buyers which challenges the current property purchases protection legislation.
The developer of Surry Hills building took to court a group of off-the-pay buyers, arguing that he is entailed to rescind buyers’ contracts, after not finishing the project on time. On the other hand, the buyers claim that the developer is just trying to cancel the contract in order to resell at a higher price.
On Wednesday, Justice Rowan Darke rules against the developer stating that it is not justly or equitable to cancel the contracts. He also made the developer pay the difference of cost and trial fees.
Tom Christensen, one of the buyers who put the deposit for a new apartment four and a half years ago said: “Hopefully this will create a legal precedent that will make it so much easier in future for off-the-plan buyers, so they won’t have to go through all the pain and agony that we have.”
The main developer’s office said that Joel Redelman is “traveling and cannot be disturbed”, so there is no declaration from his part.
Finance, Services and Property Minister Victor Dominellowho introduced important changes to the legislation, in order to protect buyers from developer’s abuses, as clawback taxes, is happy with the decision saying that justice was served. “This verdict has shown that justice has been served, and home-buyers can now make their decisions knowing they aren’t defenceless against developers who try to abuse their power.”
He also comments on the precedent this court decision creates: “It gives me enormous comfort to know that they now have a lot more protection,” he said.
It was taken to the court attention that in late July and early August a 16-unit building on Mary Street was being bought from its original developer, who ran out of money, by Mr Redelman, of Parker Logan and OZD Pty Ltd.
The “hopefully scary” letters were sent under his name. But in 2015 the legislation changed, so the developer has to apply to the Supreme Court for permission of rescinding buyers contracts.
Mr Redelman, focusing on profitability, persuaded some of the buyers to rescind their contract, or to pay up more for the same apartment. But 12 of them could not be budged and took him to court.
Mr Redelman sent letter to them stating that the apartments might be smaller or that the company might not finish the project.
After the Court’s ruling, Mr Redelman has to give up his newly completed apartment to the initial buyer in 7 days.