New changes to sunset clause provide more protection to Victorian off-the-plan buyers

New changes to sunset clause provide more protection to Victorian off-the-plan buyers
New changes to sunset clause provide more protection to Victorian off-the-plan buyers

New laws have been passed in Victoria under the Andrews Labor Government with the intent to protect off-the-plan buyers against negligent sunset clause arrangements, among other new bills included in The Sale of Land Amendment Bill 2019.

The new sunset clause regulations will retrospectively come into effect from 23rd August 2018, ensuring both current and future off-the-plan homeowners will be covered.

Up until now, developers have been able to include a sunset clause provision in off-the-plan contracts, meaning that they can terminate the contract where the plan of subdivision hasn’t been registered by a specific date. This has led to exploitation by some accounts whereby the developer has deliberately delayed delivery of a project to terminate off-the-plan contracts and then resell the apartment for a higher price.

The new initiative will mean developers may only exercise a sunset clause if written consent is provided by the buyer or Supreme Court of Victoria.

“We’re ensuring that current or future homeowners aren’t being ripped off by dishonest developers, being misled about the history of their property and that vendors who do the wrong thing are punished accordingly.”

- Minister for Consumer Affairs Marlene Kairouz

New laws will also:

  • Prohibit public auctions of land before 1 pm on Anzac Day, bringing the industry into line with the standard restricted business hours for the day
  • Strengthen the existing requirement for vendors or real estate agents to disclose material facts about a property, and enable guidelines to detail what a material fact is likely to be (for example, a property’s past history as a clandestine drug laboratory or the site of a homicide)
  • Introduce greater protections for people who purchase options to buy land as part of a land banking scheme, including requiring money paid for options to be held in a trust
  • Prohibit certain terms contracts and rent-to-buy arrangements, with significant fines and potential jail time for vendors and third-party intermediaries to act as a strong deterrent.

“Knowing they have the law behind them will give families and young people peace of mind when investing in the often-intimidating property market.”

- Minister for Consumer Affairs Marlene Kairouz

Olivia Round

Olivia Round

Olivia Round is the Features Editor of urban.com.au. Olivia specialises in news reporting, in-depth editorial content and video + podcast interviews with industry experts.

Tags: 
Sunset clause Victoria off-the-plan

Comments

Be the first one to comment on this article
What would you like to say about this project?