Earlier this year we reported on the key changes proposed by the Sale of Land Amendment Bill 2019 (Vic) (the Bill).
The Bill sought to implement a number of reforms to the Sale of Land Act 1962 (Vic) in order to address some ongoing issues in the Victorian property market.
Since the publication of our article, the Bill received royal assent on 4 June 2019. As such, we refer to the Bill as the “Amendment Act” in this update.
In the context of residential off-the-plan contracts, the objective of the Amendment Act is to prohibit a vendor from terminating a contract under the guise of a sunset clause for a non bona fide reason, including to re-market a property during a market upswing.
The key changes introduced by the Amendment Act to sunset clauses in residential off-the-plan contracts (for the sale of lots on plans of subdivision) are set out below.
This applies to all residential off-the-plan contracts on and from 23 August 2018.
Ultimately, the Court may make an order permitting the vendor to rescind if the Court is satisfied that making the order is just and equitable in all the circumstances.
This applies to all residential off-the-plan contracts on and from 5 June 2019.
A vendor may incur the following penalties for failing to include such a statement in the sunset clause of the contract:
If you are a vendor or a developer, now is the time to carefully review and update your pro forma residential contracts of sale in consultation with your lawyer.
As a general comment, the reforms under the Amendment Act (other than those relating to sunset clauses) will be implemented on or before 1 March 2020. We will continue to monitor and provide updates as the changes come into effect.
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.