Sale of Residential Property

More certainty on off-the-plan purchases  in the ACT

New laws are now in place to provide greater protection and certainty for Canberrans purchasing residential property off-the-plan.

In response to complaints from off-the-plan home buyers about the rescinding of contracts in 2021, the ACT Government introduced amendments to the Civil Law (Sale of Residential Property) Act 2003. The amendments were passed by the ACT Legislative Assembly on 1 December 2021.

The changes, which are taken to have come into force on 9 November 2021, impose conditions on the use of sunset clauses and development delay clauses in off-the-plan contracts including all types of residential sales such as units, houses, and vacant land.

Sellers will be able to include sunset or development delay clauses in off-the plan contracts, but they will only be able to use these clauses to rescind a contract if either the buyer consents or they’re permitted by an order of the ACT Supreme Court.

As part of the changes:

A seller must provide 28 days written notice to the buyer, setting out the reasoning behind the proposed rescission under the sunset or development delay clause. Then, the buyer may or may not give written consent to the rescission. If the buyer has not given written consent, the seller may seek an order from the Supreme Court to rescind a contract.

The Supreme Court must consider a range of factors, including the impact of rescission on both the buyer and seller. If a seller  wants to pursue the matter in the Supreme Court, the developer will be liable to pay the costs of the buyer unless they are able to establish that the purchaser has unreasonably withheld their consent.

Previously sellers could rescind a contract if certain deadlines or conditions weren’t met under the sunset or development delay clauses without seeking the buyer’s consent.

The amendments make sure that clauses are used  for legitimate purposes to a fairer and more equitable off-the-plan process for all Canberrans.

You can find out more information about the legislative amendments here