Consumer and Business Affairs Minister Michael Brown says developers who misuse sunset clauses will soon face the full force of the law. (ABC News: Daniel Taylor)
Legislation to stop homebuyers being left high and dry by developers misusing sunset clauses in contracts will soon be introduced to SA parliament.
Under current arrangements, sunset clauses allow both parties to terminate contracts if homes are not completed by an agreed date, but can be misused — allegedly by developers who want to cash in on rising property values.
The SA government says it will conduct consultation in the coming weeks and wants to introduce legislation to parliament by the end of the year.
South Australian homebuyers could soon be protected from "sunset clauses" that allow housing developers to terminate contracts for off-the-plan properties, the state government says.
The move comes after the government vowed to consider legislative options when a developer axed 75 contracts with homebuyers in Gawler East.
Under current arrangements, sunset clauses allow developers as well as homebuyers to terminate contracts if homes are not completed by an agreed date.
In some cases they can be misused — allegedly by developers who want to make a larger profit when property values increase.
The SA government said it would introduce legislation to parliament by the end of the year to prevent developers from misusing the clauses.
The proposed reforms would prevent a developer from triggering a sunset clause unless it had the consent of the homebuyer, or if the Supreme Court ruled that such a step was "just and equitable", the state government said.
"They'll need to go to a court and ask the court to rule that it's appropriate they use the sunset clause," Consumer and Business Affairs Minister Michael Brown said.
"The message we want to send to the developers is 'if you want to come to South Australia and develop and provide housing for people and, yes, make some money while you're doing it, then we're happy to work with you'.
Homebuyers at Springwood Estate at Gawler East were plunged into uncertainty earlier this year. (ABC News: Briana Fiore)
The move comes amid significant housing development across Adelaide, and follows similar steps in other states including New South Wales and Queensland.
Mr Brown said its latest legislation push followed property developers Wel.Co axing 75 contracts at a Springwood Estate housing development in Gawler East.
