Sunset Clause Draws the Curtain on First Home Buyer's Dreams

February 27, 2015


Western Sydney First Home Owners Burnt By Sunset Clause

Imagine this. You’ve purchased your new family home—off the plan. You’ve been given a completion date by the developer—December 2014. Come February 2015 you and your family are still in limbo. None of the townhouses in your complex have been completed and you’re being asked to cough up an extra $1 million to move into your property. You’d be heartbroken.

Sadly, that’s exactly what happened to a group of young families in Western Sydney. has the story and asked both CM Lawyer’s conveyancing expert, Alex Sapounas & practice principal, Christine Manolakos to discuss the case. You can read the article here: Why you should always read the fine print: Developers demand $1m from first home buyers

Contracts, clauses & dangerous liaisons

Just how well do you know your developer?

So what should you be taking away from this? Firstly, buying-off-the-plan always needs to be a relationship based on trust. You’re not inspecting a property and falling in love with it; you’re buying into a dream backed only by a proposal made up of blueprints and digital renderings of what the final product will look like. So, it’s extremely important you do your research!

Just like you might Google a potential partner, it’s worthwhile taking a little dig through the internet’s reservoir of content to find out if your developer has a bit of a reputation. Obviously bungled jobs, abandoned work and unfair contracts gets people talking and those conversations will end up splashed all over online message boards and news articles.

Secondly, you need to get some solid legal advice about your contract. You need to be aware of the many conditions giving your developer out clauses such as subject to pre-sales, subject to finance, subject to development approval or satisfactory development approval and, like the case for the unfortunate young families out in Sydney’s west, sunset clauses.
Ensuring these clauses are carefully worded so as not to unrealistically benefit the developer helps keep your investment safe. (This is one of the reasons why a good relationship with your conveyancer is just so crucial to getting a positive outcome.)

Thirdly, you want your developer to be accountable. Ensuring your contract includes clauses that they will endeavour to do “all things reasonable” to complete construction and register the plan.

In summary, a contract is formed by two or more parties. It’s your responsibility to do your research, get the right legal and conveyancing advice and make sure that contract is worded perfectly! Contracts and money are a dangerous liaison. Make sure you know who you’re getting into bed with before things really kick off!


 Looking for more conveyancing advice?

The following pages might be of interest. Happy reading!

The Risks of DIY Conveyancing (infographic)

Buying Off-the-Plan: The Highs & Lows of Sydney’s Property Market


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