Recent changes to legislation that offer additional protection and certainty to purchasers buying off the plan are well overdue, according to two local businesses in the property industry.
Leading Newcastle lawyer and conveyance and Director of Sessions Legal, Luke Sessions, said the changes limit vendors rights to pull out of an “off the plan” contract due to a “sunset date” clause expiring.
Luke said there have been several examples in Sydney where, due to large increases in the value of property, vendors have deliberately delayed developments so the sunset date passes. The vendor has then rescinded the contract knowing they can sell the property for a much higher price than the initial purchaser has contracted to pay.
“The good news for purchasers is that the changes to the Conveyancing Amendment (Sunset Clauses) Act 2015, mean that if a developer now wants to rescind an off the plan contract under a “sunset date” clause, the vendor must first obtain the purchaser’s written consent or an order from the Supreme Court of New South Wales,” Luke said.
“The new provisions don’t affect the purchaser’s rights under the contract, only the vendor’s rights,” he said.
Principal of Newcastle New Projects (a division of PRDnationwide), Mark Kentwell, said these changes are significant to the Newcastle residential property market with predictions of more than 500 new apartments coming on to the market over the next five to 10 years.
“It is vital that buyers and sellers are aware of these latest changes particularly in a market where there can be a limited opportunity for investors to negotiate amendments to off the plan contracts,” Mark said.
“We support any change which provides certainty for both parties entering into a contract for sale,” he said.
Luke and Mark were speaking at a free information session on buying off the plan held at Newcastle New Projects’ development display suite in Newcastle’s Hunter Street Mall on Thursday, 7 April 2016.
Image | An off the plan development – The Parque, Newcastle
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