Legislative Assembly for the ACT: 2021 Week 13 Hansard (Wednesday, 1 December 2021) . . Page.. 3934 ..
MR RATTENBURY (Kurrajong—Attorney-General, Minister for Consumer Affairs, Minister for Gaming and Minister for Water, Energy and Emissions Reduction) (11.28), in reply: I am pleased to speak in support of this bill today. The bill will improve consumer protections for Canberrans by regulating the use of sunset and delayed-development clauses in off-the plan property sale contracts. The purpose of the bill is to address the power imbalance that can occur between buyers and sellers by protecting the parties to off-the-plan contracts.
The bill responds to an issue that has been of great concern to our community. The government has been very concerned about the reports from constituents about those property developers who have taken advantage of the rising market conditions and have rescinded existing contracts for off-the plan property purchases, then relisted these properties for seemingly significantly higher sale prices.
I note that Mr Cain has also recognised this as an important issue and I was pleased to see Mr Cain present a private member’s bill on this very subject on 9 November this year as well. I do note that Mr Cain’s bill applies to sunset events and not developer-delay events, which are the provisions that we are seeing being used to rescind contracts in the ACT market.
The government recognises that rescission clauses are important clauses that provide protection to all parties to these contracts. They are generally a matter for negotiation between the parties. The government does not wish to intervene in every situation where the parties to an off-the-plan contract may wish to rescind; it merely wishes to address the unfair circumstances which have been subject to a large number of community complaints in the last few months, where it has been alleged that these clauses have been exercised for inappropriate means with little recourse available to purchasers.
The bill amends the Civil Law (Sale of Residential Property) Act 2003 to insert new part 2A in the act. This new part provides a process that a seller must undergo in order to exercise their right to rescind an off-the-plan contract under specific types of rescission clauses.
The amendments apply to the following rescission situations: firstly, the bill applies to sunset clauses. This is similar to legislation in New South Wales and Victoria, on which Mr Cain’s private member’s bill is based. A sunset clause is a contractual term which sets a final date for completion of a property development and creates a right to rescind the contract if the development has not been completed before the sunset date.
Under the bill, the following events are sunset events: the registration of the units plan for a unit, the issue of a certificate of occupancy for a residence or unit, the registration of the Crown lease for vacant residential land, and the issue of a certificate of compliance for the crown lease for a unit or land. The bill also makes provision for prescribing additional sunset events by regulation in the future.
Secondly, the bill applies to developer-delay clauses. This is broader in scope than the New South Wales and Victorian models. This expanded scope is necessary to ensure