New laws will protect homebuyers from rescission clause misuse


Released 01/12/2021

Homebuyers will be protected from sunset and development delay clauses in illegitimate and unjustifiable circumstances after the Legislative Assembly agreed to the Government’s Civil Law (Sale of Residential Property) Amendment Bill 2021.

Attorney-General Shane Rattenbury said the new laws will increase confidence for all parties involved in off-the-plan contracts.

“The recent trend of developers rescinding contracts has led to great personal distress for some buyers, as well as undermining confidence in the off-the-plan property purchase market. The housing market is already stressful for buyers, and it is often first home buyers who are looking at off-the-plan purchases. It was important to act swiftly to address these concerns and protect consumers from rescissions occurring in bad faith,” Attorney-General Rattenbury said.

“Under the legislation passed today, developers will only be able to use sunset and development delay clauses to rescind a contract if the buyer consents or if they’re permitted by an order of the ACT Supreme Court.

“A developer wanting to rescind a contract must provide 28 days written notice to the buyer, setting out the reasoning behind the proposed rescission under the clause.

“If the buyer does not agree, the developer may seek an order from the Supreme Court permitting the rescission. However, the developer must satisfy the Court that the order is just and equitable in the circumstances.”

The Supreme Court must consider a range of factors, including the impact of rescission on both the buyer and seller. If a developer wants to pursue the matter in the Supreme Court, the developer will be liable to pay the costs of the buyer unless they are able to establish that the purchaser has unreasonably withheld their consent.

The new laws are taken to have been in effect since they were introduced into the Legislative Assembly on 9 November 2021.

“Commencing the reforms from the Bill’s introduction was necessary to protect buyers and prevent opportunistic rescissions under these clauses from occurring during the time between introduction and passing of the amendments in the Legislative Assembly,” Attorney-General Rattenbury said.

- Statement ends -

Shane Rattenbury, MLA | Media Releases


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