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The NSW government has confirmed that changes to development sunset clauses will be enacted within a matter of weeks.
Off-the-plan apartment buyers are set to receive improved legal protections after the NSW government announced changes to legislation today.
Under the changes, set to be introduced in parliament in the coming weeks, developers will be required to justify any sunset clause termination of an off-the-plan sale.
If a purchaser does not give their consent for the changes to go ahead, then a developer will be required to apply to the Supreme Court for leave before any termination can take effect.
The Minister for Innovation and Better Regulation, Victor Dominello, explained that the changes were in response to reports of distressed apartment buyers being stung by last-minute contract cancellations.
“The NSW government has listened to the concerns of its citizens and is taking action. We are committed to ensuring certainty in the property market and to protecting the rights of those who purchase off-the-plan properties,” Mr Dominello said.
According to the government, some consumers have reported having their contracts rescinded by a developer under current sunset clause arrangements – only to then see the land or apartment being re-sold for a greater value shortly afterwards.
Buyers with existing contracts, as well as new buyers, will be covered by the improved protections, according to Mr Dominello.
“The NSW government is putting developers on notice that from this day forward if they use a sunset clause for no other reason than to reap a windfall profit at the expense of the purchaser, then they do so at their own peril,” he said.
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An apartment is a personal residence within a house or building occupied by several tenants.