Off the Plan – buyers beware of Sunset Clauses
Whilst signing an “Off The Plan” (OTP) Contract and paying a deposit is a real commitment, purchasers need to be aware of their rights and obligations. Clients need to be fully informed. A starting point is the contract is conditional upon the vendor / developer completing the construction and registering the plan of subdivision in a defined period of time. The contract will in effect contain a sunset clause. If the construction and registration of the plan is not completed within x months from the date of contract, the purchaser has the right to rescind or cancel the contract and have the deposit fully refunded.
Within the special conditions the contract will categorically state the length of time of the sunset clause – it might be 12 months, 18 months (the default), 24 months or even 48 months. This date is fixed and cannot be arbitrarily changed. If the sunset period is reached and the plan of subdivision is not registered, you the purchaser can elect to cancel the contract. Or you can elect to continue with the contract until the project is completed.
Dear Matt, Thank you for your prompt action on putting together a contract for the sale of our property. Very impressed and glad to note that we are in good hands.Lionel and Iris W - Vendors