Off the plan contracts undergo review
Public feedback is sought on a raft of proposals aimed at bolstering protections for home buyers purchasing a property off-the-plan, with the NSW Government today releasing a Discussion Paper for comment.
Minister for Finance, Services and Property Victor Dominello said the review will examine the modern application of the Conveyancing Act and tackle a number of issues around off-the-plan contracts. This includes information developers must disclose to buyers, cooling off periods, holding of deposits and sunset clauses.
“Purchasing a property is one of the most significant financial decisions a person or couple will make in their lifetime. It is vital that home buyers have all the relevant information they need to make an informed decision,” Mr Dominello said.
“NSW is booming and buying off-the-plan is becoming increasingly popular. But there are risks involved and buyers must look beyond glossy brochures and fancy display centres.
“The proposals are designed to both strengthen protections for home buyers and provide clarity for developers.”
In November 2015 the Government introduced laws to stop the misuse of sunset clauses in off-the-plan contracts. Under these laws, a developer requires either the permission of the purchaser or Court approval before the sunset clause can be triggered to terminate a contract.
There has been a stark increase in the number of off-the-plan contracts over recent years. In 2006/07 there were 2,148 off-the-plan contracts, contributing to 1.25 per cent of all residential property sales. Last financial year there were 29,022 off-the-plan sales, accounting for about 11.5 per cent of all residential property sales.
A Discussion Paper is available for comment at www.registrargeneral.nsw.gov.au. Submissions close 30 January 2018.