Buyers in the Foothills residential development in Campbell will likely have to shell out more money if they wish to stay with their purchase.
Developer Doma Group has advised buyers, who have been in limbo since work on the project paused last year, that the volatile construction landscape had begun to stabilise and that it was looking at a possible resumption in mid-2024.
Managing director Jure Domazet told contracted buyers in a letter dated 17 October that the next steps would involve contacting real estate agent Colliers over the next six to eight weeks to discuss their purchase.
“It is highly likely that these discussions will involve a request for additional funds from you if you wish to continue with your purchase,” he said.
Mr Domazet said the request for extra funds was being assessed on an individual basis, but older sales would require more than more recent sales, reflecting the increase in costs.
Townhouse buyers could expect to pay more as these had incurred the most dramatic cost increases.
“Our goal in this is to ensure the most equitable and feasible solutions for all parties involved,” Mr Domazet said.
Doma will also propose some design changes, particularly for the townhouses, to reduce the extra funds required.
“But the overarching aim is to deliver a dwelling that is at least equal to what was originally purchased,” Mr Domazet said.
“This consensus and design process is expected to take some time and we would not expect construction works to commence at least until mid-2024 with likely settlements in 2026.”
Even so, buyers could expect a units plan registration date of 31 December 2027 and a realistic sunset date for contracts of 31 December 2029 due to financier requirements, Mr Domazet said.
Doma was also offering buyers the option of rescinding their contract, with Doma covering reasonable legal costs up to $1650 GST inclusive and refunding the deposit.
The Foothills was put on ice almost a year ago after the project was hit with a combination of approval delays and the cost blowouts impacting the industry, and Doma had been unable to secure finance.
Mr Domazet said in his letter that this “unprecedented” situation had been exacerbated by poor construction advice from the now defunct PBS Building.
But one unhappy apartment buyer who signed up about two years ago told Region they would be bailing out of the project.
“We are rescinding the contract,” they said.
“We are completely frustrated and angry with their lack of communication and game-playing.”
The buyer had tried to walk away last year after receiving a rescission offer but had been told it was sent by mistake, and they were not eligible.
They said they bought into the Foothills because it offered everything they needed but could no longer trust that this would be the case.
“We have no faith this development will be built to the specifications and inclusions originally promised, especially as we would also be required to sign a new contract,” the buyer said.
“The final sunset clause is now December 2029, some five years after the original one in our contract, which is unacceptable to us and our circumstances. We haven’t even waited as long as those who signed in 2020/21.”
The issue of contract changes and rescissions has been controversial in the ACT, with the ACT Government passing legislation imposing conditions on development delay and sunset clauses to protect off-the-plan buyers.
Sellers now have to go to the Supreme Court to seek an order to rescind a contract if the buyer does not agree.
Doma plans to build 252 dwellings on the prime Limestone Avenue site, formerly occupied by the CSIRO, including 40 large, high-end townhouses.
It bought the site in 2016 for $20 million.
Comment was sought from Doma.