What is a Sunset Date?
Not to be confused with a lovely evening spent with your partner, a sunset date is a crucial piece of information when purchasing an Off The Plan property.
Let’s take a look at some of the most commonly asked questions.
What is a Sunset Date?
The Sunset Date is the date in a Contract of Sale when the Purchaser has the right to get their deposit back if the Plan of Subdivision has not been registered. Remember that the new Plan of Subdivision for the development is the point in the construction timeline when the individual title for your property is issued.
What is a Sunset Clause?
The Sunset Clause is the part of the contract of sale where the Sunset Date is found. Often it is only a definition and you have to keep searching. For example it may be called a ‘Registration Date’ which will be defined in the definitions section of the Special Conditions. Complicated? This is where a Your Property Australia lawyer can help to guide you through the process.
Does the Sunset Date expire often?
Of course we are only speaking anecdotally but it is unusual that the sunset date lapses on a property. Let’s consider some of the reasons that this might happen. They are all to do with the actions of the Vendor, there isn’t really anything the Purchaser can do to impact this besides heading down to the construction site and telling them to hurry up!
Why do developments fail? We could write a whole series of articles on that topic. But for new purchasers the Sunset Date may expire if the Builder runs out of money or there are substantial delays in construction. To avoid these problems look at the past history of the developer and whether they have completed past projects on time.
Remember that reputation is everything in the building industry. Look at their track record and ask them whether they completed construction on time.
When do I get my deposit back?
Obviously if the property is completed on time then that money contributes to the overall purchase price at settlement. If however the Sunset Date expires then you will be able to get it back immediately following the expiration of that period.
Can I negotiate to make my Sunset Date shorter?
Quite simply no. The sunset date is the framework chosen by the Vendor to ensure that the transaction with the Purchaser has an end date to it. Otherwise you would situations where deposit would be sucked into a black hole by builders/developers who never completed their work.
The Purchaser wants to know that at some point in the future (this can be months or years depending on the contract) if the builder hasn’t completed the development then they will get their deposit back. It is highly unlikely they will bring that conclusion period forward because they will want to give themselves as long as possible.
My Contract of Sale doesn’t have a Sunset Date at all?
Remember that not every Contract of Sale needs to have a Sunset Date or Sunset Clause in it. So if you’re purchasing a property that already has an individual title you won’t need to worry. We are only talking about purchasing ‘Off the Plan’.
If however you have or are about to purchase a property ‘Off the Plan’ then you should speak to a Your Property Australia straight away! Sometimes Sunset Clauses are hidden away under different headings in the Special Conditions but if a Vendor has actually left this clause out then you haven’t been sucked into a vacuum of a never ending construction period.
If you’re reading up on Sunset Dates then there’s a good chance you might be interested in our other ‘Off the Plan’ property articles. Click here or here for Part One and Two of our most commonly asked questions about ‘Off the Plan’ property.