Buying a property is a very exciting time for time for most people and for many, it is the biggest investment of their life which can become stressful in certain situations. There are also many legal and tax implications which need to be considered, and if you are buying property with friends or relatives, this adds a range of new things to consider.
Having a competent and experienced property and conveyancing lawyer when buying a property can help with a smooth, stress-free transaction keeping you fully informed the whole way through.
Rockliffs Lawyers are experienced in assisting property buyers with the purchase of:
- Residential and commercial properties;
- Torrens title, Leasehold title, Limited title, Qualified title, and Old Systems Title properties;
- Strata title, Company Title and Community Title properties;
- Off-the-plan properties; and
- Aged care and retirement village properties.
We can also provide advice on:
- Mortgages and Securities, including advice prior to signing mortgage documents, or prior to becoming a guarantor of a loan;
- Refinancing and discharging a current mortgage on your property;
- Negotiation and preparation of commercial and retail leases;
If a property is listed for auction, you should seek advice from your lawyer regarding the Contract prior to the auction. Your lawyer should be able to negotiate amendments to be made to the contract in the event that you are the successful bidder at the auction. It is important that you seek legal advice in relation to the Contract as soon as possible prior to attending the auction, so your lawyer has time to request and make those changes.
With the construction boom in Sydney, off-the-plan purchasers are becoming more and more common as the market continues to expand and new housing communities or estates are being developed and constructed.
An ‘off-the-plan’ purchase is one where you buy a house or unit, prior to the house or unit being built. In most cases, a deposit of 5 to 10% is paid and the contract entered into up to 3 to 4 years before the house or unit is completed.
Off-the-plan contracts are more complex and can be up to 10 times larger than a regular contract for buying an existing property. This is because they contain not only all the plans and relevant dealings of the current property or properties (if it’s a development site consisting of multiple lots that are being consolidated), but also all the draft plans and other relevant documents for the proposed unit or house you are buying, including a schedule of finishes.
The essence of an 0ff-the-plan contract is that the contract is or could be conditional upon:
- A plan of subdivision or strata plan being registered, or some approval or consent being received from Council; and
- An Occupation Certificate being received from the Local Council;
This means that if the relevant plans, approvals or certificates are not received by the developer from the Local Council or a relevant body, the seller or developer is not required to complete the contract because the condition has not been met.
What if I am waiting around for years?
All off-the-plan contracts normally include a sunset date or sunset clause. This is the last day in which the seller or developer has to complete the contract with the buyer, otherwise, the buyer of an off-the-plan contract can rescind the contract and recover their deposit that was initially paid.
A seller was previously able to also rescind the contract if they could not complete by the sunset date. However, as a result of the recent changes to the off-the-plan contract regulations as set out in the Conveyancing Amendment (Sunset Clauses) Act 2015, it is now harder for a seller or vendor to rescind an off-the-plan contract.
The changes now require vendors to obtain the consent of all the purchasers before they rescind an off-the-plan contract relying on a sunset clause, or alternatively, approach the Supreme Court of NSW to seek permission to rescind the contract.
Case Study – Sunset Clauses – Jobema Developments Pty Limited v Zhu & Ors  NSWSC 3
The first case which dealt with the new changes to the conveyancing regulations relating to sunset clauses in off-the-plan contracts was by Jobema Developments Pty Ltd (Jobema). The company sought to rescind the contracts for a development in Hurstville NSW, relying on the sunset clauses in a contract.
In that case, the sunset date for registration of the strata plan was 31 December 2015, and the parties had 14 days to rescind the contract from this date. However, the right to rescind was subject to the developer using ‘all reasonable endeavours to have the Strata Plan registered by the sunset date’.
Jobema purchased the development site from Xycom, the original seller who entered into contracts with the buyers. However, Xycom had undertaken little to no work after entering into the contract with the buyers, and Jobema was unable to register the strata plan by the sunset date. On 1 December 2015, the sellers tried to rescind the contract or offer the buyers an ‘opportunity’ to continue the purchaser at a new, higher price.
The buyer did not consent, and Jobema then applied to the Court to seek their consent. In Court, Justice Black found against the developers and dismissed the application for an order allowing them to rescind the contracts because it was not satisfied that it was ‘just and equitable’ to make that order.
It is therefore important that you get an experienced lawyer to review these contracts so you are fully informed and aware of what you are buying into and can guide you through the pitfalls which can be associated with buying off-the-plan.
Do not hesitate to contact Rockliffs Lawyers if you are considering buying a property in the near future so we can guide you through the process!