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Off the Plan Purchase Made Safer with This Law Change

The Sale of Land Amendment Act 2019 amends the Sale of Land Act 1962 (the Act) to require developers to obtain the purchaser's consent, or the permission of the Supreme Court of Victoria, before exercising a sunset clause.

Sunset clause amendments apply from 23 August 2018 and:

The legislation applies retrospectively from 23 August 2018 to protect purchasers who have existing residential off-the-plan contracts, or whose contracts may have been rescinded after that date.

As of 23 August 2018, a vendor (the developer) must have the purchaser’s written agreement to legally rescind a residential off-the-plan contract using a sunset clause. As of 4 June 2019, a vendor may also seek an order from the Supreme Court of Victoria to allow them to exercise a sunset clause.

A rescission effectively unwinds the contract as if it never existed, and returns the parties to their original positions.

If a vendor attempts to rescind a contract using a sunset clause, the rescission will not be valid unless it occurred with the purchaser’s consent or with the express permission of the Supreme Court.

Residential off-the-plan contracts that were validly rescinded by vendors under sunset clauses prior to 23 August 2018 are not covered by the reforms. Concerned purchasers in these circumstances should seek legal advice about their options.


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