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Retrospective changes to ‘off the plan’ sunset clauses now law7 June, 2019
As foreshadowed in our blog of 30 May the Sale of Land Amendment Act 2019 (Vic) is now in operation having received royal assent on 4 June 2019 — meaning the retrospective changes to off-the-plan sunset clauses retrospectively came into operation from 23 August 2018.
The new requirements prevent a vendor rescinding residential off the plan contracts based on a sunset clause without:
- at least 28 days’ written notice to a purchaser before the proposed rescission
- a purchaser’s consent
A sunset clause is a provision in a residential off-the-plan contract, that provides for the contract to be rescinded if the relevant plan of subdivision has not been registered, or occupancy permit has not been issued by the nominated sunset date.
Sunset clauses in existing contracts purporting to provide for automatic rescission will be taken to be substituted by the new requirements.
Section 10E is now in force allowing a vendor to apply to the Supreme Court for an order permitting rescission of a residential off the plan contract under a sunset clause if it is just and equitable in the circumstances. Section 10E lists matters the court must take into account when determining whether it is just and equitable to order rescission of the contract.
Section 10F requiring a specific statement in residential off the plan contract has not yet come into force. It will commence when the section is proclaimed or on 1 March 2020, whichever occurs first. At this stage the proclamation date is unknown. The proclamation will be published in the Victorian Government Gazette.
Section 10F sets out clearly what needs to be included in the off-the-plan contracts and you should use it as your guide when amending your contracts. To avoid any concern about when this section is to operate you could insert the relevant wording in a clause in your precedent contract now that says the clause is to operate once section 10F of the Sale of Land Act 1962 (Vic) comes into operation.
For more detailed information about these changes see our March 2019 bulletin Retrospective changes proposed for residential ‘off the plan’ sunset clauses back in parliament