Recission of off-the-plan contracts in the ACT has been topical in the news and, in response, the Legislative Assembly has recently moved a Bill to provide greater protection to buyers from this occurrence.
The Civil Law (Sale of Residential Property) Amendment Bill 2021 seeks to prevent developers from exercising rescission clauses to take advantage of favourable market conditions. The bill defines two types of recission clauses:
- a ‘delay event’, which is any event which delays or prevents completion of a contract, including delays in construction, or in obtaining approvals
- a ‘sunset event’, which allows a developer to rescind a contract if, for whatever reason, Registration of Unit Plans has not occurred by the contractual sunset date.
The amendment states that developers must provide 28 days’ written notice to buyers if they intend to exercise a recission clause. This notice must include the reasons for the proposed recission. If a buyer does not provide their consent to the rescission, the developer must then seek an order from the ACT Supreme Court. Without an order from the Court, the rescission cannot occur.
In summary, these changes are welcome news for buyers, who now have greater legislative protection to safeguard their future home or investment.
How can we help?
At SHG we act for both buyers and sellers/developers on a range of commercial and residential transactions in both the ACT and NSW. If you would like to have a chat about a property transaction, please contact the Property team on 02 6285 8000 or by email.
