Publications / Property
Proposed extension to statutory sunset date for off the plan sales
The Criminal and Other Legislation Amendment Bill 2011 (Qld) (Bill) was introduced in Parliament on 13 October 2011 and includes a proposed amendment to the Land Sales Act 1984 (Qld) (Act) to extend the maximum possible sunset date for off-the-plan lot contracts to 5½ years.
The Bill is yet to be passed but if passed will be good news for developers.
The current Act provides a statutory right for an ‘off the plan’ unit purchaser to terminate the contract if title is not given to a purchaser by a sunset date of 3 ½ years from when the contract is entered into.
Developers can seek Ministerial approval to extend the statutory 3½ year sunset period for a particular development but only up to a maximum of 5½ years.
The extension process is time consuming and can take 6 months or more to process adding costs to the development. The delays can result in uncertainty for developers, particularly where the extension is required to secure project finance.
The proposed new provisions (once commenced) will effectively allow developers to specify a contractual sunset date for off-the-plan contracts of up to 5 ½ years rather than 3 ½ years. If no time frame is stipulated in a contract, a default period of 3 ½ years will apply.
If this Bill is passed, developers can specify the extended sunset date of 5 ½ years in off-the-plan contracts and will no longer be burdened with the cumbersome time consuming administrative process of extending the statutory sunset date from 3½ years to up to 5 ½ years.
Potentially developers will be able to enter into off-the-plan contracts earlier in the development stages given the extended period to effect settlement.
Developers should seek legal advice on the impact this may have on their current or proposed developments. Off-the plan contracts should be reviewed to take advantage of the extended sunset date for contracts entered into after the Bill is passed and becomes law.
Focus covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. Focus is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.