On 17 November 2015, the NSW Government passed the Conveyancing Amendment (Sunset Clauses) Act 2015. The legislation was the result of recent reports of Vendors exercising their contractual rights to rescind Off-The-Plan Contracts by the purposeful manufacture of delays to trigger a rescission right under a Sunset Clause. The Act prevents Vendors of an Off-The-Plan Contract from rescinding the Contract under a Sunset Clause. Where the Sunset Clause in the Contract reserves the Vendor’s right to rescind, the Clause is voided and the new provisions will instead apply.
In Off-The-Plan Contracts, the nominated Sunset Date is usually defined as the last date by which the developer must complete their primary obligation in the Contract – to achieve registration of the relevant Sub-division Plan.
The new provisions have retrospective application from 2 November 2015. Therefore, from this date, if a seller wants to rescind an Off-The-Plan Contract under a Sunset Clause, the seller must first obtain the purchaser’s written consent or an Order of the Supreme Court. The new provisions do not affect the Purchaser’s right under the Contract. In granting the order for rescission, the Court must be satisfied that rescission is “just and equitable” in all circumstances and must take in account certain considerations.