NSW Innovation and Better Regulation Minister proposes reforms to protect off the plan apartment purchasers.
The NSW government has today proposed two measures to protect buyers who purchase off-the-plan apartments from sunset clause cons. Sunset clauses in some real estate contracts allow vendors to rescind a contract if construction runs more than a year over expected completion time, with the NSW government stating some developers purposely delay works to cancel the contract and then re-sell apartments at higher prices. Innovation and Better Regulation Minister Victor Dominello has outlined two options to protect buyers, and is inviting public comment over the next month. He suggests a term in all off-the-plan contracts, only allowing the purchaser to rescind, or to imply a term whereby if the vendor cancels a contract under a sunset clause and then resells the unit within a certain period of time, then the purchaser is entitled to damages equal to the difference on sale price between the two contracts. "There is significant concern about the way sunset clauses are being used to rescind off-the-plan contracts,” Dominello said. "Purchasing a property is a life-changing decision, and we need to ensure consumers are protected against exploitative practices."