Page 3117 - Week 11 - Tuesday, 9 November 2021
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outcome for these buyers, whose prospective homes will not eventuate in the way they originally agreed. Now they are faced with not only that distress but also the frustrating and expensive position of trying to re-enter a very competitive market. It is an extremely concerning trend.
Rescission provisions can have a legitimate use and act as an important protection. However, when they are potentially used for the purposes of opportunistic profiteering we have a duty as legislators to step in and arrest this emerging trend. Off-the-plan developments do involve significant risks for both sellers and buyers. The inclusion of sunset and development delay clauses in off-the-plan contracts is intended to provide both purchasers and developers with protection from these risks. Historically, these clauses have been exercised sparingly and any issues have usually been managed privately between the parties.
However, it is clear from the occurrences of the last few months that we need to improve our current regulatory framework. I am deeply concerned that some developers may be acting unconscionably and utilising these clauses to make a profit at the expense of home buyers. This is clearly unacceptable. This is why the government has taken swift and urgent action to introduce these reforms today. I am proud to introduce this bill and reassure impacted home buyers and those members of our community who are looking to purchase their future homes via off-the-plan contracts that the government has heard their concerns and has acted.
I would like to thank the constituents who have written to me and other members of the Assembly sharing their experiences and bringing this matter to our attention. Hearing from the community on the issues affecting our city is an essential part of understanding the efficacy of our existing regulatory frameworks and developing solutions that keep Canberra a great place to live.
These measures strike a balance between improving buyer protections while also allowing developers to enforce their rescission rights in appropriate circumstances. The reforms insert a new part, part 2A, into the Civil Law (Sale of Residential Property) Act to regulate how certain problematic rescission clauses in contracts for the purchase of off-the-plan property can be used.
Specifically, the bill addresses rescission provisions in relation to both delay events and sunset events and will provide protections to off-the-plan purchasers of houses, units and vacant land for residential use. Under the amendments, a seller may only rescind an off-the-plan contract under a defined rescission provision where the buyer has consented in writing, or by order of the Supreme Court, or in circumstances prescribed by regulation.
If a seller wishes to seek consent from a buyer to rescind the contract they must do so in accordance with the process set out in the bill; that is, a seller must provide a buyer with at least 28 days written notice of the proposed rescission and outline the reasons why rescission is being sought. The notice must also include a statement that if consent is refused the seller may apply to the Supreme Court for an order allowing the rescission and that the seller will pay the buyer’s court costs unless the court
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