In line with recent legislative changes, all vendors under an off-the-plan contract will no longer be able to exercise its sunset date termination rights without first:
- giving written notice to the purchaser 28 days before the proposed rescission setting out certain prescribed details; and
- obtaining each purchaser's written consent to the rescission.
If the vendor cannot obtain the consent of the purchaser, it will have to apply for, and obtain, an order from the Supreme Court allowing the vendor to terminate the contract.
The above will apply to all off-the-plan contracts which were entered into on or after 23 August 2018.
In addition to the above, there is also a new notice requirement. The following notice must be included in off-the-plan contracts moving forward.
NOTICE TO PURCHASERS OF PROPERTY "OFF-THE-PLAN"
(Section 10F Sale of Land Act 1962)
- The vendor is required to give notice of a proposed rescission of the contract under the sunset clause
- The purchaser has the right to consent to the proposed rescission but is not obliged to consent.
- The vendor has the right to apply to the Supreme Court for an order permitting the vendor to rescind the contract.
- The Supreme Court may make an order permitting the rescission of the contract if satisfied that making the order is just and equitable in all the circumstances.
If the above notice is not included in an off-the-plan contract, the contract will still remain enforceable. However, there are financial penalties that can be imposed on non-complying vendors. The penalty can be as much as $198,264 for a corporate vendor and $39,652 for an individual.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.