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