NSW Government to introduce new off the plan sunset clause legislation

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Buyers of off the plan developments in New South Wales will soon have increased protections, with the state government to introduce laws that will make it harder for developers to enact sunset clauses.

Sunset clauses in off the plan developments allowed the purchaser or developer to rescind an off the plan contract if work had been significantly delayed; however, the government had become concerned developers were deliberately delaying work so they could cancel existing contracts and resell properties at a higher price.

Under the proposed changes, which NSW Minister for Innovation and Better Regulation Victor Dominello will introduce to parliament later this month, developers will have to justify any sunset clause termination of an off the plan sale

If a purchaser does not give their consent, then a developer will be required to apply to the Supreme Court for leave before any termination can take effect.
 
“The NSW Government has listened to the concerns of its citizens and is taking action. We are committed to ensuring certainty in the property market and to protecting the rights of those who purchase off the plan properties,” Dominello said.

“The NSW Government is putting developers on notice that from this day forward if they use a sunset clause for no other reason than to reap a windfall profit at the expense of the purchaser – then they do so at their own peril,” he said.

The proposed legislation will apply not only to contracts made after the law comes into effect, but will also apply to contracts that are still in operation
 

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Comments
  • Erko says on 02/11/2015 03:10:05 PM

    A much needed change
    A far more even playing field
    This problem would not be happening in a level or falling market!

  • Bruce from Sydney says on 03/11/2015 12:34:14 PM

    Yes, please pass this law as soon as possible as currently me and my wife have bought our first home off-the-plan scheduled to be completed next Year, and due to price rises, it is likely the Developer will try to sell it off for profit.

    I am fearful that we are now priced out of the same market and also wasted 3 Years waiting time for nothing.

    Victor, only you can save these First home buyers like us from peril!!

  • Mary o'connor says on 04/11/2015 11:21:31 PM

    Great legislation Mr Dominello.
    however does it cover my secondary purchase from the buyer who bought from the developer?
    The property will be finished but probably mot registered before the sunset date on march 31st 2016.
    The contracts were to be settled simultaneously.
    my vendor wants to charge me more.
    the developer has given him an extension.
    Mary

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