For more than 50 years, Eckermann Conveyancers has helped South Australians navigate property transactions with confidence. As South Australia’s largest conveyancing firm and a trusted name in property transactions, we’re committed to keeping buyers informed about changes that may impact their property ownership journey.

The South Australian Government has recently announced proposed reforms aimed at strengthening protections for people purchasing off-the-plan properties. If passed, these changes could significantly affect the way sunset clauses operate and provide greater certainty for homebuyers.

Key Takeaways

In summary, the South Australian Government is proposing reforms that could provide stronger protections for off-the-plan buyers and improve transparency throughout the development process.

  • South Australia is proposing stronger protections for off-the-plan property buyers.
  • Developers may need purchaser consent or Supreme Court approval before terminating certain contracts under a sunset clause.
  • Buyers could receive additional rights when significant changes are made to a development.
  • The proposed reforms may apply retrospectively to some existing off-the-plan contracts.
  • Increased disclosure obligations may require developers to provide more timely updates about project delays, risks and changes.
  • Seeking conveyancing advice before signing an off-the-plan contract can help buyers understand their rights and obligations.

What Is a Sunset Clause?

A sunset clause is a provision commonly included in off-the-plan contracts. It allows either party to terminate the contract if a development is not completed by an agreed date.

Traditionally, sunset clauses have protected both buyers and developers when construction delays occur. However, concerns have emerged about instances where developments have been delayed and contracts terminated, allowing properties to be resold at higher market prices.

Why Are the Reforms Being Proposed?

The South Australian Government has announced it will consult on legislation designed to prevent the unfair use of sunset clauses and increase transparency for purchasers buying off the plan.

According to the proposed reforms, developers would no longer be able to terminate an off-the-plan contract under a sunset clause unless:

  • The purchaser consents to the termination; or
  • The Supreme Court determines that termination is “just and equitable” in the circumstances.

This change is intended to ensure buyers are not unfairly disadvantaged if a developer seeks to terminate a contract due to rising property values.

What Would the Courts Consider?

If a purchaser does not agree to terminate the contract, a developer may need to apply to the Supreme Court.

The Court would consider factors such as:

  • The reasons for the delay;
  • Whether the developer acted in good faith;
  • Any increase in the property’s value; and
  • Other relevant circumstances surrounding the development.

The proposed reforms would also require developers to pay a buyer’s legal costs in these proceedings unless the Court determines the purchaser unreasonably withheld consent.

Additional Protections for Off-the-Plan Buyers

The proposed reforms go beyond sunset clauses.

The Government is also proposing increased disclosure obligations for developers, requiring buyers to receive more timely and accurate information regarding:

  • Project delivery timeframes;
  • Development progress;
  • Project viability;
  • Costs; and
  • Other significant project changes.

Importantly, developers may also be required to notify purchasers within 14 days of any material change to a project, including changes to the design or draft plan. Purchasers would then have 14 days to decide whether to accept the change or rescind the contract.

Could the Changes Apply to Existing Contracts?

One of the most significant aspects of the proposed reforms is that they may apply retrospectively to existing off-the-plan contracts that remain current when the legislation commences.

The Government has indicated that retrospective application is being considered to protect current buyers and align South Australia with reforms introduced in other Australian jurisdictions.

For buyers currently involved in an off-the-plan purchase, this could provide additional protections if the legislation is passed in its proposed form and their contract remains on foot when the changes take effect.

What Does This Mean for Homebuyers?

If enacted, these reforms would provide greater certainty and transparency for purchasers entering into off-the-plan contracts.

Potential benefits include:

  • Stronger protections against unfair contract termination;
  • Greater accountability for developers;
  • Improved disclosure and project transparency;
  • Better access to important information during construction; and
  • More confidence when committing to a significant financial investment.

While the proposed changes are positive for consumers, off-the-plan contracts remain complex legal documents. Every contract contains unique conditions that can significantly impact your rights and obligations.

Why Conveyancing Advice Matters

Purchasing a property off the plan differs from a standard residential purchase. Buyers are often committing to a property that has not yet been built, meaning construction delays, design changes and contractual conditions can have a major impact on the transaction.

Having an experienced conveyancer review your contract before signing can help you:

  • Understand sunset clause provisions;
  • Identify potential risks;
  • Review disclosure statements;
  • Understand rescission rights; and
  • Make informed decisions before committing to the purchase.

At Eckermann Conveyancers, we’ve been assisting South Australians with property transactions for more than 50 years. Whether you’re purchasing your first apartment, a house and land package, or an investment property, our experienced team can help you navigate the conveyancing process with confidence.

Where more complex legal issues arise, including contractual disputes or matters requiring legal advice, our clients also have access to the expertise of Eckermann Lawyers, providing the benefit of a comprehensive property and legal services team under one trusted brand.

Buyers looking to stay informed about consumer protections and property-related legislative changes can also visit Consumer and Business Services South Australia (CBS) and Land Services SA, which provide useful resources relating to property transactions and ownership.

Need Advice on an Off-the-Plan Purchase?

Whether you’re considering an off-the-plan purchase or currently navigating one, our conveyancers can help you understand the process, review key contract terms and ensure you’re informed before making a commitment.

Contact Eckermann Conveyancers today to discuss your property transaction.