Six months ago Legal Light raised concerns home buyers and
investors who bought apartments off-the-plan were shocked by
developers dumping their contract and reselling the property for a
far higher price.
The developers were exploiting a sunset clause loophole in
off-the-plan purchasing conveyancing laws. The original purpose of
the sunset clause was to protect both buyers and sellers in
unfinished developments so that either side could get their money
back if the building wasn't completed or the buyer didn't
complete their payment.
But with the soaring property market some developers delayed
completing construction until the sunset clause kicked in, then
demanded more money or they would rescind the contract and raise
the sale price of the property.
Now the government has acted to close the loophole. Under new
conveyancing laws off-the-plan buyers will have greater protections
that require developers to justify any sunset clause
Developers will need a buyer's consent before they end a
contract using a sunset clause, otherwise the developer will need
to apply to the Supreme Court to justify termination of the
Merrill Phillips, conveyancing expert at Stacks Law Firm, said
it was important to get experienced legal advice before signing any
property contract as they can be very complicated.
"For most of us buying a home or investment property is the
biggest purchase of our lives, so it is very important to make sure
you are legally protected and you get what you are paying
for," she said.
"It can also happen that developers will try and sell you
something that looks fantastic in designer models and glossy
brochures, but then seek to change the size and arrangement of
apartments after you sign. You need to know your rights.
"Every contract is different and you should obtain legal
advice on its conditions and terms, as well as what you are liable
for if you withdraw from the contract. A legal expert can spot the
pitfalls in a contract, including by-laws that might apply in a
"Buyers should also consider whether the contract allows
them to make changes to finishes of the apartment such as
appliances and tiles and sinks in bathrooms and kitchens.
"They should also be aware that sometimes the sunset date on
the contract can be extended at the discretion of the Vendor. This
extension could be for an additional 12 months or more, resulting
in the "off the plan purchase" not being available when
The Department of Fair Trading advises anyone buying property to
get legal advice on the contract as there can be costly
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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