The NSW government introduced new rules for off the plan contracts in December 2019.
These new rules aim to improve purchasers’ rights when entering into off the plan contracts. This is important because buying off the plan can be risky. Depending on what happens during the development process, lots may change in terms of area, layout or location, easement locations may change, and so on.
Similarly, they provide purchasers some extra protections. The cooling off period has been extended to ten business days (up from five), although purchasers can still waive their rights to cooling off.
With respect to sunset clauses – the date after which parties can rescind (cancel) the contract if it hasn’t settled – vendors can only rescind with a purchaser’s written consent or an order of the Supreme Court of NSW. This means that if an off the plan purchase hasn’t settled by the sunset date but the purchaser still wants to proceed, that they can require the vendor to carry out the contract unless they succeed through the Supreme Court.
A summary of the amendments is listed below.
Succinctly, while the new rules improve purchasers’ rights, purchasers are likely still going to need to take steps to exercise those rights eg demonstrating their rights to rescind for changes to the disclosure statement.
On a more positive note, the new rules do make it easier for purchasers to identify key information about off the plan contracts. The disclosure statement should act as a quick guide to key contract dates which may otherwise be hidden in the contract’s special conditions.
For more information please contact Geoff Milani: