Off-Plan Rescission
A client has purchased an apartment off the plan in Victoria and is seeking to rescind the Contract of Sale signed in 2024. They have made a substantial deposit but are concerned about affording the mortgage. The contract is not subject to finance, and the client is aware that the deposit may be forfeited. They are considering nominating another purchaser, although they have yet to communicate with the developer regarding renegotiation. The client is aware of the cooling-off period but is uncertain about additional costs or consumer protection laws that may apply.
Questions about this case
These answers have been verified by a lawyer in the LEAP networkWhat are the legal implications of forfeiting the deposit if we decide not to proceed with the purchase?
If you decide not to proceed, forfeiting the deposit can have significant financial implications. Under Victorian law, if a contract is rescinded beyond the cooling-off period or without legal grounds, deposits are generally forfeited to the seller, potentially resulting in a total loss. It's essential to explore all legal avenues, including any applicable consumer protection laws.
Is it possible to challenge the condition that the contract is 'not Subject to Finance' in any way?
Challenging the 'not Subject to Finance' condition can be tricky, as contracts are typically enforced strictly. However, if you can prove that misleading conduct occurred during the contract formation, there may be grounds to challenge this condition under Australian Consumer Law.
What are the steps and potential costs involved in nominating another purchaser to take over our Contract of Sale?
To nominate another purchaser, you would need to find a buyer willing to accept the original purchase price, which will usually require the developer's consent. There may be fees or legal costs involved, so budgeting is advisable. It is prudent to consult a solicitor to ensure all legal requirements are met.
Are there any consumer protection laws or cooling-off periods applicable in Victoria that might allow us to rescind the Contract of Sale?
In Victoria, there is typically a cooling-off period of three business days for residential property sales, allowing you to rescind with minimal penalty. If this period has expired, consumer protection laws might offer limited options unless there are undisclosed defects.
Could there be any renegotiation options with the developer to amend the contract terms or recover the deposit?
Renegotiation with the developer may be possible if you can articulate financial hardship due to high mortgage costs. Showing willingness to find mutually beneficial solutions may also open negotiation channels. Consulting a property lawyer could further enhance your strategy.
