The Sustainable Planning and Other Legislation Amendment
Bill 2011, which was passed as an Act with amendments on 14
February 2012, makes a key change to the circumstances under which
off-the-plan contracts for property sales may be avoided under the
Land Sales Act 1984.
This amendment will provide some comfort to developers and
financiers in times when neither can afford for contracts to be
avoided due to a purchaser's default.
Here, partner Tony Baldwin and associate Janelle Metcalf outline
the change the Act has introduced.
Key change to off-the-plan contract sales under the
Land Sales Act 1984
Until now, section 27 of the Land Sales Act 1984
required a vendor to provide a purchaser of property under an
off-the-plan contract with the registrable instrument of transfer
for a lot within the sunset period of 3.5 yearsi from
the contract date, failing which a purchaser could avoid the
The Sustainable Planning and Other Legislation Amendment Act
2012 clarifies that the purchaser's right in section 27 to
avoid the contract will not apply if the vendor is unable to
provide the transfer due to the purchaser's default.
Significantly, this will not only apply to contracts entered
into after 15 February 2012 (the commencement date of the
amendment), but also to contracts entered into before 15 February
2012 where they remain in force and settlement has not yet taken
place. This applies regardless of whether the sunset period has
elapsed, and includes circumstances where the vendor has commenced
an action for specific performance that has not yet been
This amendment will close a potential loophole used by
purchasers to avoid contracts in circumstances where the vendor is
ready, willing and able to settle, but is prevented from handing
over the transfer due to the purchaser's default. In these
circumstances, the vendor would have previously been obliged to
return the deposit to the purchaser under the requirements of the
Land Sales Act - essentially allowing the purchaser to avoid a
contract for its own default and receive a full refund of the
For more information about the changes the Sustainable
Planning and Other Legislation Amendment Act 2012 makes to the
Sustainable Planning Act 2009 and the Urban Land Development
Authority Act 2007, please see our
Alert issued 20 February 2012.
IThis period may be extended by regulation to
not more than 5.5 years in certain approved
Many retail leases include a covenant to trade, requiring the tenant to open the premises for trade during certain hours.
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