You sign the contract, pay the deposit, and choose a lot number on a plan. The building itself doesn’t exist yet, and won’t for a year or more. An off the plan purchase runs on different rules to buying an established home. The rules govern what the vendor must disclose before you sign. They also govern what happens if the finished product doesn’t match the plan. Finally, they set out what a developer can do if construction runs late. That question drives most disputes.This article covers the contract itself and where the real risk lives once you’ve exchanged. It then explains the sunset clause protections that decide what happens if the project misses its date.
What “off the plan” means
An off the plan contract sells a residential lot that doesn’t exist yet when you sign it. Under the Conveyancing Act 1919 (NSW), that covers a strata lot in an unbuilt or partly built building. It also covers a lot in an unregistered subdivision. The contract can only describe the lot provisionally, using a draft plan. The final surveyed plan only goes on title later. Everything that follows turns on that one fact: you are contracting against a draft, not a finished product.
The contract: what must be disclosed before signing
Section 66ZM of the Conveyancing Act 1919 (NSW) requires the vendor to attach a disclosure statement before you sign. The statement must use the approved form and has two parts. The first is a set of draft documents the vendor attaches to the contract. The second is a set of questions the vendor answers directly on the form.
The documents that must be attached:
- A copy of the draft plan, prepared by a registered surveyor
- The schedule of finishes, if one is proposed
- The draft section 88B instrument, if one is to be lodged
- For an apartment, the draft strata by-laws and any strata management statement
The vendor must also answer several questions on the form itself. These cover whether the lot sits in a strata scheme, and the completion timeframe and its clause. The vendor must state whether a sunset date applies, whether the contract allows an extension, and under which clause. The form asks whether late completion costs the purchaser extra. It also asks whether development approval exists and, if so, its number. The vendor must confirm whether the development has a principal certifying authority. Finally, the vendor must say whether it can cancel the contract on a development-related event.
The Act itself is silent on what happens if the vendor skips this step; that’s left to the regulations. Under the Conveyancing (Sale of Land) Regulation 2022 (NSW), a purchaser can rescind if the vendor fails to attach the disclosure statement, provided notice is given within 14 days of the contract being made and before completion. An inaccuracy in a statement that was attached is a different problem, covered below.
Cooling-off: longer, and why
Every residential property contract comes with a cooling-off period, starting the moment the contract is made. Most purchases get until 5pm on the fifth business day; an off the plan contract gets until the tenth — twice as long, because there’s a draft plan and a disclosure statement to check, not a finished house. That extra time can only be cut short if the purchaser gives the vendor a certificate from an independent solicitor or barrister, one with no connection to the vendor’s side, confirming they’ve explained the contract, the certificate, and what giving it away means.
Between exchange and completion: when the plan changes
Before completion, the vendor must serve the registered plan and its accompanying documents on the purchaser, who can’t be required to complete any earlier than 21 days later.
The vendor may learn that the disclosure statement is no longer accurate. If the inaccuracy affects how the purchaser can use or enjoy the lot, the vendor must give written notice. The vendor must serve that notice at least 21 days before completion. Four kinds of change don’t count at all. These are a different lot number, street name or shared-expense apportionment. For an apartment, a parking or storage change that still matches the contract also doesn’t count. Ordinarily though, the vendor serves no notice, for the reason that follows. That leaves it to the purchaser to pick up on any changes.
Even where a matter genuinely has changed, the rescission right is narrower than the notice obligation: it’s only available if the purchaser wouldn’t have entered the contract knowing about the inaccuracy, and would be materially prejudiced by it. Meeting only one of those isn’t enough, and if the purchaser doesn’t rescind in time, the disclosure statement is treated as if it always matched what was eventually registered. Therefore, the vendor only needs to serve notice if the vendor believes the changes detrimentally affects the purchaser.
Sunset clauses: the mechanism, and why it was reined in
A sunset clause lets a contract be rescinded if the “sunset event”, creation of the lot, or issue of an occupation certificate, doesn’t happen by the “sunset date” fixed in the contract. That’s fair in principle: neither side should stay locked into a contract for a development that never gets built. But the clause can’t operate automatically. Wording that says the sale simply ends once the date passes is read as permitting rescission only through the process below, and a vendor can’t draft around it.
Before 2015, some vendors used it differently: if a lot was worth more by the time construction ran late, the vendor could let the sunset date pass, rescind, and resell at the new price. The purchaser had no say in it.
That’s no longer available. A vendor can only rescind with the purchaser’s written consent, a Supreme Court order, or as the regulations otherwise allow and a court order isn’t automatic. The vendor must first give at least 28 days’ written notice explaining why rescission is proposed and why the sunset event didn’t happen in time. The court grants the order only if satisfied it’s ‘just and equitable’, weighing the contract’s terms, the vendor’s conduct, the delay’s cause, the development’s likely completion date, any rise in the lot’s value, and the effect on the purchaser. It can still award damages against the vendor, who pays the purchaser’s costs unless consent was unreasonably withheld.
None of this runs the other way. A purchaser can rescind under a sunset clause without consent, a court order.
The real risks, and what actually protects you
Signing early comes with costs a completed-house purchase doesn’t have.
- The building can differ from the plan within the limits of the “material particular” test – the only remedy is the narrow rescission right above, not a general right to renegotiate.
- The price is fixed at exchange, sometimes years before completion, with no statutory relief if the property is worth less by settlement.
- Finance approved at exchange can lapse or be revalued down by the time settlement is funded, years later.
- If the developer becomes insolvent before completion, your deposit is held in trust and can’t be released early, but that protects only the deposit, not the rest of the purchase, and pursuing an insolvent developer for anything more is a harder proposition.
Conclusion
Buying off the plan trades one kind of certainty for another: you lock in a price and a choice of lot before anyone else can, but give up the ability to inspect what you’re buying, and completion becomes an estimate rather than a date. The disclosure statement and the longer cooling-off period front-load that uncertainty as early as possible. Once you’ve exchanged, the material particular and sunset clause provisions are what’s actually available if things change and neither is a general right to renegotiate or walk away. They’re narrow and time-limited, worth understanding before you need them.
What you should do next
Have the contract and disclosure statement reviewed before you sign, not after. Ten business days moves faster than it sounds when you’re checking a draft plan and finishes schedule for the first time. If you receive a notice, get advice straight away: both carry short, fixed windows to act, and once they close, they don’t reopen.
Sources
Conveyancing Act 1919 (NSW) ss 66ZL, 66ZM, 66ZN, 66ZP, 66S, 66W, 66ZS, 66ZT.
Conveyancing (Sale of Land) Regulation 2022 (NSW) cl 13 of Schedule 1, and cll 21, 22 and 24.
NSW Registrar General, Off the plan (registrargeneral.nsw.gov.au) and approved off the plan disclosure statement form.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
