ACT amends law to protect off-the-plan buyers from having contracts cancelled by developers

The Civil Law (Sale of Residential Property) Amendment Bill 2021 was agreed to on Wednesday, with the new laws coming into effect from November 9, 2021, the date the bill was presented to the Assembly.

Under the new laws, developers must receive a buyer's consent to cancel a contract under a sunset and development delay clause.

The developer must give 28 days' written notice to the buyer explaining the reasoning.

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Jan Moon, who had her townhouse contract cancelled by developer 3 Property Group, said the amendment is good news for future buyers.

"We wouldn't want anybody to be in this position that we're in right now where we're struggling to find a house and we've lost a lot of money," she said.

"So if it protects buyers, we're all for it."

Ms Moon is among more than 90 Canberrans who have reportedly had their off-the-plan contracts cancelled by 3 Property Group in the midst of a rising property market.

Reece Peart, whose townhouse contract was also rescinded by the developer, created a Facebook group for others in the same situation.

"We've all come together, shared our own stories ... and I definitely think it's had an impact on the decisions and lawmaking processes as well," he said.

Mr Peart said he hoped the new laws would restore buyer confidence.

"It's a good result for the consumer. I think it will add comfort for families because I know families have been quite hesitant to buy into [off-the-plan] properties," he said.

Under the new laws, if the buyer does not agree to the rescission, the developer may seek an ACT Supreme Court order. The developer would be liable to pay the costs of the buyer unless they can establish the purchaser has unreasonably withheld their consent.

ACT Attorney-General Shane Rattenbury said the new laws would help alleviate stress for off-the-plan purchasers, many of whom are first home buyers.

"The recent trend of developers rescinding contracts has led to great personal distress for some buyers, as well as undermining confidence in the off-the-plan property purchase market," he said in a statement.

Mr Rattenbury said it was important to "act swiftly" to "protect consumers from rescissions occurring in bad faith".

During the bill's debate on Wednesday, Canberra Liberals Member for Ginninderra Peter Cain said he believed his almost identical bill is what led Mr Rattenbury to present the bill.

"On the 21^st of October I was quoted in The Canberra Times stating that my bill, which I had in hand, would be presented on the first sitting day in November," Mr Cain said.

"It is my opinion, Mr Assistant Speaker, that my statement that I had a bill to present on that day is what has spurred the Attorney-General to present this bill."

In early October, Mr Rattenbury told The Canberra Times he was aware of contract rescissions in the ACT and was concerned the laws at the time allowed it to happen.

"I've asked my directorate to work on legislative reform options as a priority and to potentially mirror the NSW laws," he said at the time.

While Mr Cain said the Canberra Liberals supported the bill, he said he was disappointed with the timing of the "important consumer protection".

"In 2015, NSW saw this problem and fixed it. In 2019, Victoria saw this problem and fixed it. And in between those times, in the ACT, the ACT Civil and Administrative Tribunal said the incidents of such unfair practice should be investigated to see if law reform is required," he said.

A class action is currently under way on behalf of a group of Canberra buyers whose townhouse contracts were cancelled by 3 Property Group.

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