The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
2 WEEKS UNTIL OUR UNMISSABLE FLAGSHIP CONFERENCE MORE THAN 550 ALREADY ATTENDING
2 WEEKS UNTIL OUR FLAGSHIP CONFERENCE 550+ ALREADY ATTENDING
REGISTER NOWDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
print
Print
PolicyStaff WriterThu 24 Sep 15

Off-The-Plan Sunset Clauses Need Independent Review

h

The Urban Development Institute of Australia (UDIA) NSW today urged the State Government to conduct an independent review into the reported misuse of sunset clauses in off-the-plan property contracts to understand how widespread the issue is.

UDIA NSW Chief Executive Stephen Albin said the government needs to establish how many incidences there have been of developers purposely rescinding contracts after the sunset clause to sell properties at a higher price, and who these operators are. Mr Albin said as far as he is aware, such behaviour is not common practice.

“Our view is if this is happening, and it’s rare that it does happen, then it needs to be stopped,” he said. “Because people act in good faith they expect the counter party to act in good faith, and we have to resolve this issue.”

Mr Albin said it is crucial that the government does not base its policy responses on anecdotal reports.

“We need an independent review into the problem before making any policy changes to understand the extent of the problem,” he said.

Mr Albin said any reform to the Conveyancing Act 1919 would need to consider implications to housing supply as it could impact on the ability to raise development finance.

“The government’s proposal to allow only purchasers the option to rescind contracts during the sunset clause could have a negative impact on a project investor’s ability to secure finance to build homes because of the increased risk,” he said.

“The market is also rising now, but if and when it dips, purchasers should not have the option to rescind a contract simply because a dwelling is worth much less than it was when they entered into it,” he said.

“Any new legislation must be measured and balanced, and before any changes, it’s vital the government establishes the scope of the issue.”

Mr Albin said it is also important that reputable developers who deliver a project beyond the sunset clause because of reasons beyond their control – such as delays getting applications through councils or financing issues – do not get penalised.

To understand the extent of the problem the Minister of Innovation and Better Regulation Victor Dominello has announced a public consultation on the use of sunset clauses.

"There is growing concern about the way sunset clauses are being used to rescind off the plan contracts,” Mr Dominello said.

“With buying off the plan becoming more and more common, particularly for new strata schemes, this is something we need to look at closely.

“Purchasing a property is a life-changing decision and we need to ensure consumers are protected against exploitative practices,” Mr Dominello said.

ResidentialAustraliaPlanningPlanningSector
AUTHOR
Staff Writer
"TheUrbanDeveloper.com is committed to delivering the latest news, reviews, opinions and insights into the best of urban development from Australia and around the world. "
More articles by this author
ADVERTISEMENT
TOP STORIES
The Port of Brisbane has released its Vision 2060 which details the need for inland rail connectivity
Infrastructure

Brisbane Port’s $15bn Future Faces One Big Obstacle

Renee McKeown
5 Min
Freecity Rouse Hill triple towers 2 Tempus Street
Exclusive

Freecity Takes Covers Off $330m Triple Towers in Sydney’s North-West

Leon Della Bosca
5 Min
Parallel Workshops Stockdale Housing PBSA project
Exclusive

Suburban Success Story Turns PBSA Thinking on its Head

Leon Della Bosca
7 Min
Exclusive

Interstate Developers Find Lots to Love in ‘Progressive, Affordable’ SA

Taryn Paris
5 Min
Bates Smart Richmond Sportslink HERO
Exclusive

BtR Focus Drives Bates Smart’s Richmond Sportslink Concept

Leon Della Bosca
6 Min
View All >
Industrial

Inland Rail: Site at Rural Hub Comes to Market in Victoria

Lindsay Saunders
Stockland's Triniti HERO
Build-to-Rent

Stockland $400m North Ryde BtR Approved on Appeal

Leon Della Bosca
Logan Wastewater Funding hero
Infrastructure

Flush of Funding to Deliver 20,000 New SEQ Homes

Phil Bartsch
Without the $135.98-million injection it is claimed the Logan City Council would have had to stop approving new housing …
LATEST
Industrial

Inland Rail: Site at Rural Hub Comes to Market in Victoria

Lindsay Saunders
2 Min
Stockland's Triniti HERO
Build-to-Rent

Stockland $400m North Ryde BtR Approved on Appeal

Leon Della Bosca
3 Min
Logan Wastewater Funding hero
Infrastructure

Flush of Funding to Deliver 20,000 New SEQ Homes

Phil Bartsch
3 Min
The Port of Brisbane has released its Vision 2060 which details the need for inland rail connectivity
Infrastructure

Brisbane Port’s $15bn Future Faces One Big Obstacle

Renee McKeown
5 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/plan-sunset-clauses-need-independent-review