Off-the-plan buyers deserve better protection

Ian Bushnell 18 October 2021 5
Shane Rattenbury

Attorney-General Shane Rattenbury must find a solution. Photo: File.

The ACT Government has taken far too long to protect off-the-plan apartment and townhouse buyers from developers reneging on deals by using rescission clauses in contracts.

NSW recognised the issue as far back as 2015, legislating that purchasers have to consent in writing to the rescission of a contract, or the vendor needs to obtain an order of the Supreme Court to do so.

A 2019 landmark judgment in the NSW Supreme Court upheld buyers’ rights when it found against a developer of a new building in Sydney’s inner suburbs who took 12 of its apartment buyers to court. The builder argued it was within its rights to rescind the contracts as problems had pushed the building’s completion deadline beyond the sunset clause date.

The buyers argued that the developer was trying to cancel their contracts to resell the apartments for a higher price in the rising market.


READ MORE: Rattenbury pledges action after developer tears up home contracts


That is a similar scenario to what has been unfolding for 3 Property Group customers who find themselves without their dream home and behind the eightball in a sizzling property market.

In this instance, the company has told buyers that it was walking away because of approval delays and being prevented from proceeding with building works for more than 90 days due to circumstances beyond their control.

Some customers have since seen their properties advertised for sale for $150,000 to $200,000 more than the original purchase price.

Attorney-General Shane Rattenbury is concerned that this practice could become commonplace throughout the sector.

He has ordered Justice and Community Safety to urgently investigate a legislative response.

It’s a pity the government didn’t heed the advice of the ACT Civil and Administrative Tribunal in 2016 when it recommended regulatory action after a case involving a previous incarnation of 3 Property Group. It’s important that the government this time follows through with reform for several reasons beyond just protecting the rights of buyers.

There is always an element of risk involved in buying off the plan, but buyers are entitled to believe that once a contract is signed, all things being equal, the developer will deliver.


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It is usually the biggest investment anyone will ever make and so much of the purchase involves the basic emotional need for shelter, home and security.

Not all of those who now find themselves out of the market will be able to find a way back, especially with prices rising so fast.

The property industry itself must be feeling nervous about 3 Property Group’s actions, which may be perfectly legal but have the potential to reflect poorly on a sector that sometimes struggles to maintain a positive image.

There is a real risk of reputational damage to an industry that employs 20,000 people and is vital to the ACT’s economic success story.

Those who sell property must also be feeling awkward because relationships and trust are the bases for enduring success, and this is a small town.

Mr Rattenbury needs to ensure that the issue does not get lost in the bureaucracy or put in the too-hard basket so he has something substantive to take to the Assembly by the end of the year.

JACS should be able to develop an ACT solution that will work for both buyer and developer, so the heartache and soured experiences of recent times are not repeated.


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5 Responses to Off-the-plan buyers deserve better protection
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vicees vicees 3:55 pm 15 Oct 21

Why we do not learn from other State/Territory experiences. Why have the developers been given so much freedom in the AC? Sometimes the answer is right in front of us but unfortunately the Government opts not to see. Is it because the revenue it makes from developers? One can only speculate but ultimately Canberrans have to pay the price. So often Governments start thinking about acting when the horse is bolted. Is it also related to too much power without scrutiny?

ChrisinTurner ChrisinTurner 2:40 pm 15 Oct 21

I wonder why the ACAT recommendation was put in the bottom drawer back in 2016?

Keith Lewis Keith Lewis 10:51 am 15 Oct 21

The ACT government should freeze property contracts pending the findings of an enquiry. This would prevent more travesties of justice.

    Rob Rob 11:11 am 15 Oct 21

    That’s a very good idea.

    kenbehrens kenbehrens 5:47 pm 15 Oct 21

    Horse has already bolted, with contracts rescinded and properties relisted / resold.

    I think there is a strong argument for retrospective legislation to prevent deliberate profiteering by developers or compensation payments back to the buyers who have acted in good faith and now are unable to buy something equivalent.

    In these situations, the buyer is generally of limited means and a vulnerable person in these contracts. The developer is holding all of the cards.

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