The Legislative Assembly has passed the government’s Civil Law (Sale of Residential Property) Amendment Bill 2021, giving more homebuyers protection from illegitimate sunset and development delay clauses in unjustifiable circumstances in off-the-plan contracts.

ACT Attorney-General Shane Rattenbury said confidence in the off-the-plan property purchase market has been undermined by the recent trend of developers rescinding contracts.

He said first home buyers in the ACT tended to look towards off-the-plan purchases and the housing market was already stressful for buyers.

The new laws are intended to increase confidence for all parties involved in the off-the-plan contracts.

“Under the legislation passed today, developers will only be able to use sunset and development delay clauses to rescind a contract if the buyer consents or if they’re permitted by an order of the ACT Supreme Court,” Mr Rattenbury said.

“A developer wanting to rescind a contact must provide 28 days’ written notice to the buyer, setting out the reasoning behind the proposed rescission under the clause.

“If the buyer does not agree, the developer may seek an order from the Supreme Court permitting the recission. However, the developer must satisfy the Court that the order is just and equitable in the circumstances.”

The range of factors the Court will consider includes the impact of the rescission on both the buyer and seller.

The developer will be liable to pay for the Supreme Court costs if they are unable to establish the purchaser unreasonably withheld their consent to rescind the off-the-plan contract.

The new laws are taken to have been in effect since they were introduced into the Legislative Assembly on 9 November.

“Commencing the reforms from the Bill’s introduction was necessary to protect buyers and prevent opportunistic rescissions under these clauses from occurring during the time between introduction and passing of the amendments in the Legislative Assembly,” Mr Rattenbury said.

3 Property Group, the developer central to the recent major rescission of contracts which prompted the government to push through the legislation, has been contacted for comment.

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