The ACT Government has passed new legislation that will protect off-the-plan buyers from sunset and development delay clauses.
The Legislative Assembly agreed to the Civil Law (Sale of Residential Property) Amendment Bill 2021, which was presented last month to set up protection for off-the-plan buyers and limit the developers’ rights to call off contracts.
Under the new law, developers will only be able to use sunset and development delay clauses to revoke contracts only if the buyer consents of if they are given permission by an order of the ACT Supreme Court.
Under this new law, a developer who wishes to rescind a contract must provide 28 days written notice to the buyer, which indicates the reasoning behind the proposed termination of the contract.
If the buyer does not agree, the developer then must seek an order from the Supreme Court to allow the rescission of the contract.
However, it is important for the developer to ensure that their reasoning presented to the Supreme Court is just and equitable.
It is also crucial to note that should the developer decide to pursue the matter in the Supreme Court, it will be liable to pay the costs of the buyer unless it was able to establish that the latter has “unreasonably withheld their consent.”
Attorney-General Shane Rattenbury said this new law will boost the confidence of all parties involved in off-the-plan contracts, especially after the recent trend of developers rescinding contracts resulting in personal distress for some buyers.
“The housing market is already stressful for buyers, and it is often first home buyers who are looking at off-the-plan purchases,” he said.
“It was important to act swiftly to address these concerns and protect consumers from rescissions occurring in bad faith.”
Photo by Daniel McCullough on Unsplash.