Increased protections for Canberrans buying off-the-plan

Australian Greens

Canberrans purchasing residential properties off-the-plan will have greater protection under proposed changes to the use of sunset and development delay clauses.

“Under the current law, property developers can rescind a contract if certain deadlines haven’t been met under rescission clauses. Over the last few months, I have received a concerning number of complaints about the trend of developers rescinding contracts under these clauses,” Attorney-General Shane Rattenbury said.

“I’m very concerned to hear about homebuyers losing the homes they set their hearts on, now inconvenienced and potentially out of pocket. This shouldn’t be allowed to occur except in legitimate, justifiable circumstances, and certainly not just because a developer has determined they can make a greater profit elsewhere.

“Today I presented the Civil Law (Sale of Residential Property) Amendment Bill 2021 in the Assembly, to ensure rescission clauses are used for the legitimate purposes for which they are included in contracts and to curtail any cases where they could be abused.

“Under the proposed changes, developers will still be able to include sunset and development delay clauses in off-the plan contracts, but they will only be able to use these clauses to rescind a contract if the buyer consents or if they’re permitted by an order of the ACT Supreme Court.

“The developer must provide 28 days written notice to the buyer, setting out the reasoning behind the proposed rescission under the sunset or delay clause. Then, the buyer may or may not give written consent to the rescission. If the buyer has not given written consent, the developer may seek an order from the Supreme Court to rescind a contract.

“These amendments were adapted from similar legislative responses in NSW and Victoria. However, they go further, applying to both sunset clauses and delay clauses, as the evidence we have is that delay clauses give the same opening for inappropriate opportunistic conduct.

“When deciding an application from the developer for an order, the Supreme Court must consider a range of factors, including the impact of rescission on both the buyer and seller. If a developer wants to pursue the matter in the Supreme Court, the developer will be liable to pay the costs of the buyer unless they are able to establish that the purchaser has unreasonably withheld their consent.

“These new protections for home buyers will help increase confidence from all involved in the off-the-plan process and create a more fair and equal system for all Canberrans.”

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