Legal changes to vendor/developer off-the-plan contract requirements – ‘sunset clause’
Ian Gray, Principal and Solicitor at Rethink Law
Recent changes to NSW law means that from 2 November 2015, vendors/developers must now obtain the consent of the buyer (or an order from the Supreme Court of NSW) if they wish to rescind (cancel) an ‘off-the-plan’ contract using a ‘sunset clause’.
In the past either the vendor or the purchaser could rescind a contract if the sunset date lapsed. There have been many circumstances where purchasers have waited the 12 months or later for the property to be built and plan to be registered only to experience a vendor taking an opportunity to rescind the contract and then put the property back on the market for a higher price. It has left a sour taste in purchasers mouths considering they have paid deposits and incurred other expenses such as loan application costs and conveyancing costs , not to mention their loss of opportunity to buy the property they had come to think of as their new home or a great investment. Purchasers feel as though they have been ripped off when they see a vendor making a windfall out of the vendors delay.
Importantly a purchaser still has the ability to rescind a contract where a sunset date passes. This gives a get out in case the development has stalled due to construction issues, planning difficulties or costs.
There are still plenty of issues and potential pitfalls to look for in ‘off-the-plan’ purchases and we at Rethink Law look forward to helping you understand all the issues in such a purchase.
Our team of solicitors and conveyancers can tell you how to get started now. If you need help understanding the process or just have a general question, I’d love to support you. Feel free to book an appointment to come for a coffee (from our own in-house coffee shop, Recharge Espresso) and speak to one of our conveyancers (02) 4962 4440.