Sale of Land Amendment Act 2019 - Legislation update

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5 June 2019
Legislation updates

The Victorian Government has passed new laws that will remove the ability of developers to use sunset clauses to intentionally delay building projects and exploit buyers.

Under the Sale of Land Amendment Act 2019 (the Act), developers will only be able to exercise a sunset clause with written consent from the buyer, or permission of the Supreme Court of Victoria.

The new laws on sunset clauses are backdated to 23 August 2018. The changes mean that a sunset clause exercised from that date, regardless of when the contract was signed,  must be in accordance with the new laws.

Any vendor or buyer who is unsure whether the new laws apply to their specific contract and circumstances, should seek independent legal advice. 

Sunset clause provisions are commonly found in off-the-plan contracts to allow developers to cancel the contract where the plan of subdivision has not been registered by a specified date.

The new laws protect buyers, who have raised concerns about developers deliberately postponing the completion of construction work in order to cancel signed contracts using an existing sunset clause, and then re-sell the property at a higher price.

The Act will also:  

  • strengthen the existing requirement for vendors or real estate agents to disclose material facts about a property, and enable guidelines to detail what a material fact is likely to be (for example, a property’s past history as a clandestine drug laboratory or the site of a homicide)
  • prohibit public auctions of land before 1pm on Anzac Day, bringing the industry into line with the standard restricted business hours for the day
  • introduce greater protections for people who purchase options to buy land as part of a land banking scheme, including requiring money paid for options to be held in a trust
  • prohibit certain ‘terms contracts’ and rent-to-buy arrangements, with significant fines and potential jail time for vendors and third-party intermediaries to act as a strong deterrent.

The changes implement key outcomes of the Consumer Property Law Review’s examination of the Sale of Land Act 1962.

Reforms other than those relating to sunset clauses will be implemented by no later than 1 March 2020. We will continue to provide information as the changes come into effect.