Changes to the Sale of Land Act 1962 (Vic)

Developers and vendors in Victoria should be aware of new changes to the Sale of Land Act 1962 (Vic) (Act).

The changes, which were proposed last year but failed to pass before the State Government entered caretaker mode, passed parliament on 28 May 2019 and will shortly come into effect. The changes have a focus on consumer protection and include:

  • restrictions on a vendor’s ability to rescind an ‘off the plan’ contract due to the expiry of a sunset date;
  • a prohibition on certain terms contracts and rent to buy arrangements;
  • increased disclosure obligations on vendors and real estate agents regarding ‘material facts’ about a property; and
  • protection for purchasers of options to purchase under land banking schemes.

This alert addresses the changes as they relate to sunset clauses in off the plan contracts, however, if you are a developer and are unsure how the other changes may affect you, our Property and projects team would be pleased to help.

What you need to know

The changes to the Act mean that a vendor - typically a developer - under an off the plan contract will no longer be able to rescind a contract under a sunset clause without:

  • giving notice to the purchaser 28 days before the proposed rescission setting out certain prescribed details; and
  • obtaining each purchaser’s written consent to the rescission.

If the purchaser does not agree, the vendor may apply to the Supreme Court for an order allowing it to rescind. The Act sets out the issues which the Court must consider in making its determination and the costs consequences for the unsuccessful party.

While a vendor may still be able to terminate off the plan contracts under other appropriately drafted clauses in its particular contract, this new regime around sunset clauses will apply retrospectively from August 2018, when the changes were first proposed. Any vendor seeking to terminate an off the plan contract under a sunset clause should seek our advice.

Importantly, vendors and developers should now review their standard off the plan contracts as the Act now includes requirements for the drafting of sunset clauses themselves. There are heavy penalties for non-compliance. At Hall & Wilcox we have drafted appropriate clauses to ensure that our clients meet these new obligations by the due date of 1 March 2020. If you are planning a new development, our team is ready to help.


Natalie Bannister

Natalie Bannister

Partner & Commercial National Practice Leader

Natalie leads the Hall & Wilcox's Commercial practice and has broad experience across many areas of commercial law.

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