12 November 2021

Moves afoot to protect off-the-plan buyers but builders warn there could be consequences

| Lottie Twyford
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Residential construction

The Vivace residential development in Throsby where 3 Property Group buyers had their contracts rescinded. Photo: Michelle Kroll.

Both the Canberra Liberals and the ACT Government have moved to introduce legislation to protect off-the-plan buyers from developers using rescission clauses to cancel contracts and relist the property in order to profit from a booming property market.

Attorney-General Shane Rattenbury and Canberra Liberals MLA Peter Cain this week presented two different bills which amend the Civil Law (Sale of Residential Property) Act 2003, seeking to have more regulation of rescission mechanisms such as sunset and development delay clauses.

Both told the Assembly they’d been made aware of numerous Canberrans who’d had their off-the-plan property contracts rescinded.

Numerous buyers are taking action against the property developer 3 Property Group, which is accused of using a sunset clause that allows both buyer and seller to get out of the contract to then resell the property for a higher value.

It’s a relatively new practice in the Canberra property market, with Mr Rattenbury saying such clauses had historically been used for legitimate reasons.

He introduced an amendment to “provide improved consumer protections for Canberrans by regulating the use of sunset and development delay clauses”.

Shane Rattenbury

Attorney-General Shane Rattenbury introduced a bill to protect buyers from the unfair use of rescission clauses. Photo: Dominic Giannini.

“As members will be aware, the Canberra property market is continuing to see rapid growth and, for many Canberrans, entering the market can be a challenging experience and one which has been further exacerbated by the impacts of the COVID-19 pandemic,” he said.

Mr Rattenbury went on to say he was deeply concerned about reports developers were profiteering from the current market by using such clauses to rescind contracts for off-the-plan properties before relisting the property at a higher price.

“We have the duty, as legislators, to step in and arrest this trend,” Mr Rattenbury said.

The Attorney-General noted rescission clauses would still be able to be included under the proposed changes, but could only be used in legitimate, justifiable circumstances.

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Under the proposal, the developer must provide 28 days’ written notice to the buyer in which the reasoning for the proposed rescission under the sunset or delay clause is given.

The buyer must give written consent. If not, the developer can then seek an order from the Supreme Court to rescind a contract, Mr Rattenbury explained.

The Attorney-General said such amendments had been adapted from similar legislative responses in NSW and Victoria, but they went further as they applied to both sunset clauses and delay clauses.

The proposed bill took effect from Tuesday (9 November), to stop any last-minute efforts on behalf of developers to exploit and abuse any rescission triggers.

It’s not, however, retrospective.

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Liberal MLA Peter Cain presented a similar bill that would amend ACT legislation so developers would require consent from the buyer or a Supreme Court order to rescind a contract.

“It’s a very unfair situation, caused by a practice I’d like to see come to an end,” he said.

The debate in the Assembly on both bills was adjourned and will resume on the next sitting day.

The ACT Master Builders Association, however, is wary of what it sees as a lack of consultation with key stakeholders.

“The government’s failure to consult with developers, builders and financiers will mean that there will be unintended consequences of these laws, which will ultimately result in higher unit prices,” he said.

Mr Hopkins cited unprecedented building material cost increases, labour shortages and time delays caused by lockdowns, which had made many projects planned pre-pandemic unviable.

He said no developers would proceed with unviable projects so it was often preferable to rescind a contract and then go back to the drawing board, rather than starting a project and then going broke mid-construction.

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Linda Seaniger6:34 pm 12 Nov 21

Legislation long over due. Ignore MBA self interest. They are never interested in buyer concerns about building practices.

Scott Anthony2:11 pm 12 Nov 21

‘MBA’ should stand for Master Bull Sh!ters Association… They’ve never been able to even come close to a balanced assessment of the building industry…

What a disgrace… Buyers ARE the industry, YOU only exist for buyers…. but treat them like an ATM….


We had a whole range of crooked things our builder was doing, all documented via emails from the builder.

Some would probably count as fraud, such as the builder claiming increased costs because a supplier had increased their prices, but when we checked with the supplier they confirmed the price had not increased.

We raised this with HIA and MBA, and the response from both was essentially: “We asked the builder about this. He denied it so case closed”.

They are both organisations that exist to protect builders. This means taking the side of crooked builders over customers.

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