In a departure from an expose of the best supermarket deals or running after a faceless man with a black bar across his face, A Current Affair yesterday broadcast a story on the recent spate of developers exercising their right to rescind a contract if the sunset date is reached.
A sunset date allows the purchaser or vendor (developer) to get out of a contract once a certain date (or time period after signing a contract) is reached. In effect it provides the buyer a level of security that if the vendor fails to deliver on their contractual obligations, the deposit can be recouped and the contract terminated. In the current environment, particularly in overheated markets like Sydney, some developers are (purposely) allowing the sunset date to be reached to allow for the contract to be rescinded and the property sold for an inflated price to their benefit.
Recent reports like these have naturally led to a degree of angst among investors who face the possibility of forcibly having their contract terminated. To quell concerns, the New South Wales Government recently moved to introduce legislation to protect buyers from situations where construction is purposely delayed to allow for a sunset date to lapse. At Blue Wealth, we have seen sunset dates come and go without one contract forcibly rescinded, and not one single client has ever lost their deposit. This is largely a result of the due diligence we conduct on the developer as part of our initial research process, with our strict guidelines coming close to eliminating this facet of risk from investing.
It’s not just about finding the right property in the right market at the right time, it’s ensuring the project delivery team has the credentials to fulfil their contractual obligations, so that a satisfactory result is achieved for all stakeholders. Tune in to A Current Affair tonight for another hard hitting story curiously titled ‘Pensioners at war with immigrant overpaid politicians at overpriced supermarkets’. Obviously not a real title, but you can bet if it were it’d come complete with some ominous music and oversized phrases slamming into the screen in some PowerPoint magic.