VIC Property Law - Ending Purchase Contract?

[dsasson3]

Hi,

We purchased off-the-plan property a couple of years ago in the outside of Melbourne, but as of today construction has not commenced yet. The construction lawyer is not replying to any of our emails requesting details on the advancement of the project. This whole situation is making us very nervous. The sunset clause is 48 months for registration of the plan but we would rather not wait that long.

Looking at the contract, the planning permit attached to sale was issue in January 2015 with an expiry if the development is not commenced within 2 years (I don't know yet if the planning permit has been extended). Can I end the purchase contract and ask for refund of my deposit if the planning permit attached to the off-the-plan contract of sale is expired?

Thanks for your help,

 

[Rod]

There is no magic answer here. You need to look at the terms and conditions of your contract. If you are unclear about the meaning of the terms then you need to see a lawyer.

 

[Rob Legat - SBPL]

At an absolute guess (but Rod is right, it depends on the terms of your contract), if there's a sunset clause of 48 months then trying to get out beforehand is likely to incur some difficulty.

 

[dsasson3]

Thanks both of you for your answers. Agree that trying to get out before hand is difficult, and i am not considering this possibility lightly. However i don't like the idea of having my deposit locked for 2 more years if the developer does not intend to proceed with the development anyway.

Let me detail my idea. Section 9AC of the Sale of Land Act 1962 (Vic) provides that, for off the plan contracts, vendors must give written notice to a purchaser if there is an amendment to the plan of subdivision. The purchaser can rescind the contract within 14 days of receiving notice and is entitled to a return of their deposit if that amendment will materially affect the lot that has been sold.
Question:
- Is the expiry of the planning permit from the city council supporting the plan considered as an "amendment to the plan of subdivision"?
- Does the expiry of the planning permit materially affects the lot that i have purchased?
I'm not a lawyer, but i would say that the plan of subdivision is rendered invalid if there is no planning permit supporting it, and that the absence of planning permit does have a material impact on my lot.

 

[Rob Legat - SBPL]

No, and the section is more prescriptive than that. It relates to a change required by the Registrar of Titles or requested by the vendor, only. I could be wrong, but I would wager that the ambit of this section is to give purchaser's an out if there is a change to the format or dimensions of their proposed lot.

Either way, a planning permit and plan of subdivision are two separate things.

It's not uncommon for planning permits to be amended and extended. If you think you might have an angle with this, check with Council. If there is no current planning permit in hand or underway, you might have some grounds to believe the developer isn't going ahead and request a termination. However, if they've still got significant time left before the sunset, and there isn't a contractual/legislative requirement to have a current planning permit during the period of contract, they may deny you.