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This is a Bill, not an Act. For current law, see the Acts databases.
New South Wales
Conveyancing Amendment (Sunset Clauses)
Bill 2015
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.
Overview of Bill
The object of this Bill is to prevent developers from unreasonably rescinding off the plan contracts
for residential lots under sunset clauses.
Outline of provisions
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides for the commencement of the proposed Act on the date of assent to the
proposed Act.
Schedule 1 Amendment of Conveyancing Act 1919 No 6
Schedule 1 [2] inserts proposed Division 10 (containing proposed section 66ZL) into Part 4 of the
Conveyancing Act 1919 (the Principal Act) which sets out the circumstances in which a vendor
may rescind, under a sunset clause, an off the plan contract for a residential lot. An off the plan
contract is a contract for the sale of a residential lot (the subject lot) that has not been created at
the time that the contract is entered into. A lot is created when the plan creating the lot becomes a
registered plan. A sunset clause is a provision of an off the plan contract that provides for the
contract to be rescinded if the subject lot is not created by the sunset date (being the date set out
in the off the plan contract as the latest date by which the subject lot must be created).
A vendor who wishes to rescind an off the plan contract under a sunset clause must give each
purchaser under the contract at least 28 days notice in writing of the proposed rescission. The
vendor is then permitted to rescind under the clause only if each purchaser under the contract
b2015-125.d09
Conveyancing Amendment (Sunset Clauses) Bill 2015 [NSW]
Explanatory note
consents to the rescission, the Supreme Court permits the rescission or the rescission is otherwise
permitted by regulations made under the Principal Act. A sunset clause cannot automatically
rescind an off the plan contract. The Supreme Court can make an order permitting a vendor to
rescind an off the plan contract only if the vendor satisfies the Court that making the order is just
and equitable in all the circumstances. In determining whether it is just and equitable the Court
must take a number of matters into account, including whether the vendor has acted unreasonably
or in bad faith, whether the subject lot has increased in value and the effect of the rescission on
each purchaser. The vendor is liable to pay the costs of a purchaser in relation to the proceedings
for an order unless the vendor satisfies the Court that the purchaser unreasonably withheld consent
to the rescission. The proposed section does not limit any right that a purchaser may have to
rescind an off the plan contract under a sunset clause. Schedule 1 [1] makes a consequential
amendment.
Schedule 1 [3] provides that proposed section 66ZL applies to off the plan contracts regardless of
whether they were entered into before, on or after the commencement of that section and it also
provides for proposed section 66ZL to have retrospective effect from 2 November 2015 (being the
day on which the Minister for Innovation and Better Regulation announced that this Bill would be
put before Parliament). The proposed provision provides that the rescission of an off the plan
contract under a sunset clause by a vendor on or after 2 November 2015 is taken not to have been
done in accordance with the contract unless the required notice was given, and the rescission
occurred, in accordance with proposed section 66ZL.
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First print
New South Wales
Conveyancing Amendment (Sunset Clauses)
Bill 2015
Contents
Page
1 Name of Act 2
2 Commencement 2
Schedule 1 Amendment of Conveyancing Act 1919 No 6 3
b2015-125.d09
New South Wales
Conveyancing Amendment (Sunset Clauses)
Bill 2015
No , 2015
A Bill for
An Act to amend the Conveyancing Act 1919 to prevent a developer from unreasonably rescinding
an off the plan contract for a residential lot under a sunset clause.
Conveyancing Amendment (Sunset Clauses) Bill 2015 [NSW]
The Legislature of New South Wales enacts: 1
1 Name of Act 2
This Act is the Conveyancing Amendment (Sunset Clauses) Act 2015. 3
2 Commencement 4
This Act commences on the date of assent to this Act. 5
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Conveyancing Amendment (Sunset Clauses) Bill 2015 [NSW]
Schedule 1 Amendment of Conveyancing Act 1919 No 6
Schedule 1 Amendment of Conveyancing Act 1919 No 6 1
[1] Section 52 Application of Part 4 to land under Real Property Act 1900 2
Omit "and 9" from section 52 (2). Insert instead ", 9 and 10". 3
[2] Part 4, Division 10 4
Insert after Division 9: 5
Division 10 Off the plan contracts 6
66ZL Rescission under sunset clauses 7
(1) In this section: 8
off the plan contract means a contract for the sale of a residential lot (the 9
subject lot) that has not been created at the time that the contract is entered 10
into. 11
residential lot means a lot (whether a strata lot or otherwise) that is residential 12
property within the meaning of section 66Q. 13
sunset clause means a provision of an off the plan contract that provides for 14
the contract to be rescinded if the subject lot is not created by the sunset date. 15
sunset date means the date set out in the off the plan contract as the latest date 16
(subject to any extension provided for in the contract) by which the subject lot 17
must be created. 18
(2) For the purposes of this section, a lot is created when the plan creating the lot 19
becomes a registered plan. 20
(3) A vendor may rescind an off the plan contract under a sunset clause if the 21
subject lot has not been created by the sunset date, but only if: 22
(a) each purchaser under the contract, at any time after being served with 23
the notice under subsection (4), consents in writing to the rescission, or 24
(b) the vendor has obtained an order of the Supreme Court under this 25
section permitting the vendor to rescind the contract under the sunset 26
clause, or 27
(c) the regulations otherwise permit the vendor to rescind the contract 28
under the sunset clause. 29
(4) It is a term of an off the plan contract that a vendor who is proposing to rescind 30
the contract under a sunset clause must serve each purchaser under the contract 31
notice in writing at least 28 days before the proposed rescission that specifies 32
why the vendor is proposing to rescind the contract and the reason for the delay 33
in creating the subject lot. 34
(5) A sunset clause cannot automatically rescind an off the plan contract and, if it 35
purports to do so, it is to be read as if it instead permits the contract to be 36
rescinded on or after the sunset date in accordance with this section. 37
(6) The Supreme Court may on the application of a vendor under an off the plan 38
contract make an order permitting the vendor to rescind the contract under a 39
sunset clause but only if the vendor satisfies the Court that making the order is 40
just and equitable in all the circumstances. 41
(7) In determining whether it is just and equitable in all the circumstances the 42
Court is to take the following into account: 43
(a) the terms of the off the plan contract, 44
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Conveyancing Amendment (Sunset Clauses) Bill 2015 [NSW]
Schedule 1 Amendment of Conveyancing Act 1919 No 6
(b) whether the vendor has acted unreasonably or in bad faith, 1
(c) the reason for the delay in creating the subject lot, 2
(d) the likely date on which the subject lot will be created, 3
(e) whether the subject lot has increased in value, 4
(f) the effect of the rescission on each purchaser, 5
(g) any other matter that the Court considers to be relevant, 6
(h) any other matter prescribed by the regulations. 7
(8) The vendor is liable to pay the costs of a purchaser in relation to the 8
proceedings for an order under this section unless the vendor satisfies the 9
Court that the purchaser unreasonably withheld consent to the rescission of the 10
off the plan contract under the sunset clause. 11
(9) Nothing in this section limits any right that a purchaser may have to rescind an 12
off the plan contract under a sunset clause. 13
(10) Notice may be served on a purchaser by serving it on a person who is 14
authorised under the off the plan contract as a representative of the purchaser. 15
(11) A provision of an off the plan contract has no effect to the extent that it is 16
inconsistent with this section. 17
[3] Schedule 9, Part 9 18
Insert after Part 8: 19
Part 9 Provisions consequent on enactment of 20
Conveyancing Amendment (Sunset Clauses) 21
Act 2015 22
15 Section 66ZL applies to existing contracts 23
Section 66ZL applies to an off the plan contract regardless of whether the 24
contract was entered into before, on or after the commencement of that 25
section. 26
16 Retrospective application of section 66ZL 27
(1) Section 66ZL is taken to have effect on and from 2 November 2015. 28
(2) The rescission of an off the plan contract under a sunset clause by a vendor on 29
or after 2 November 2015 is taken not to have been done in accordance with 30
the contract unless the required notice was given, and the rescission occurred, 31
in accordance with section 66ZL. 32
(3) Regulations made under section 66ZL within 12 months after the 33
commencement of that section, may take effect at any time on or after 34
2 November 2015. 35
(4) Expressions used in this clause have the same meaning as they have in 36
section 66ZL. 37
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