{"id":16424,"date":"2026-10-27T09:00:00","date_gmt":"2026-10-26T22:00:00","guid":{"rendered":"https:\/\/chuatan.com.au\/?p=16424"},"modified":"2026-10-27T09:00:00","modified_gmt":"2026-10-26T22:00:00","slug":"buying-off-the-plan-victoria-sunset-clauses-deposits-defects","status":"publish","type":"post","link":"https:\/\/chuatan.com.au\/en\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\/","title":{"rendered":"Buying Off the Plan in Victoria: Sunset Clauses, Deposits and Defects"},"content":{"rendered":"<p class=\"wp-block-paragraph\">In 2023 Ms Li signed a contract to buy an off-the-plan apartment in Melbourne, due for completion within two years. Construction was repeatedly delayed, nearby prices rose, and then she received a notice from the developer saying it intended to rescind the contract under the \u2018sunset clause\u2019 and refund her deposit. Can she refuse? In Victoria the answer is usually yes: to rescind, the developer needs her written consent or an order of the Supreme Court.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">At a glance<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Buying off the plan means signing to buy a property before the plan of subdivision is registered and the building is complete.<\/li>\n\n<li>Since 2019, a developer wanting to rescind a residential off-the-plan contract under a sunset clause must give at least 28 days' written notice and obtain the buyer's consent or a Supreme Court order.<\/li>\n\n<li>The deposit on an off-the-plan contract generally cannot exceed 10% of the price and is usually held in trust until the plan is registered.<\/li>\n\n<li>If the registered plan differs materially from the version at signing in a way that materially affects your lot, you may be able to end the contract.<\/li>\n\n<li>Defects in a new home can be pursued under statutory building warranties, and from 1 July 2026 Victoria introduced a \u2018first resort\u2019 Home Warranty Scheme.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">What is a sunset clause and what changed in 2019?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A sunset clause allows either party to end the contract if the plan of subdivision is not registered, or an occupancy permit is not issued, by a certain date. In the past, some developers used construction delays to rescind contracts after prices had risen, then resold at a higher price. In response, Victoria amended the Sale of Land Act 1962 in 2019 so that, before rescinding a residential off-the-plan contract under a sunset clause, the developer must give the buyer at least 28 days' written notice explaining the reasons for rescission and for the delay, and telling the buyer they are not obliged to consent.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">If the buyer does not consent, the developer can only apply to the Supreme Court for an order. The court considers the contract terms, whether the developer acted in good faith, the reasons for the delay, any increase in the property's value and the effect of rescission on the buyer, in deciding whether rescission is \u2018just and equitable\u2019. The developer generally also has to pay the buyer's costs of that proceeding. The reforms also apply to residential off-the-plan contracts signed before they commenced.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Deposits, plan changes and stamp duty<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Victorian law caps the deposit on an off-the-plan contract at 10% of the price, and buyers can try to negotiate a lower deposit or use a deposit bond. The deposit is generally not released to the developer before the plan is registered; it is held in a trust account. At signing you receive a \u2018proposed\u2019 plan; if the plan finally registered changes in a way that materially and adversely affects your lot \u2013 for example a significantly smaller area, or a car space or storage cage removed \u2013 the law in certain circumstances allows you to end the contract. Contracts also usually require the plan to be registered within a certain period, failing which the buyer can end the contract.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On stamp duty, Victoria's off-the-plan duty concession has been broadened to all buyers of strata apartments, units or townhouses, and extended to 20 October 2026; in the 2026\u201327 Budget the Victorian Government announced a further extension to 20 April 2027, subject to legislation. Foreign buyers should separately confirm how the additional foreign purchaser duty applies.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Defects and protections at handover<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Before settlement, buyers are generally entitled to inspect the property at an agreed time. Record any problems in a written list and ask the developer to fix them before settlement or within the defects period. The law implies warranties into domestic building work \u2013 for example that the work will be carried out in a proper manner and in compliance with the law \u2013 and these generally extend to later owners, with building claims generally able to be brought within 10 years of the occupancy permit.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Victoria's building regulation has also changed significantly: from 1 July 2025 the Building and Plumbing Commission replaced the former Victorian Building Authority and Domestic Building Dispute Resolution Victoria; from 1 July 2026 a new \u2018first resort\u2019 Home Warranty Scheme applies to residential work of three storeys or less with contracts of $20,000 or more; and for apartment buildings of four storeys or more, a developer bond scheme will apply to projects with building permits issued on or after 1 July 2027. Ask which protections apply to your development before you sign.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Checklist before signing<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Check the developer's and builder's background, past projects and any record of disputes.<\/li>\n\n<li>Read the sunset date, completion deadline and extension clauses carefully.<\/li>\n\n<li>Check the proposed plan, area, car space, storage and finishes schedule.<\/li>\n\n<li>Find out the proposed owners corporation fees and rules.<\/li>\n\n<li>Confirm the deposit amount, how it will be held, and whether a deposit bond is accepted.<\/li>\n\n<li>Allow for the possibility that the bank's valuation at settlement is lower than the price, and keep a funding buffer.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">FAQs<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">The developer says it will rescind under the sunset clause. Do I have to agree?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">For Victorian residential off-the-plan contracts, the buyer is not obliged to agree. To rescind, the developer needs the buyer's written consent or a Supreme Court order, and must give at least 28 days' written notice.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Do I have to pay a 10% deposit off the plan?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">10% is the legal maximum, not a required amount. Buyers can negotiate a lower deposit or ask whether a deposit bond is accepted.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What if the bank values the property below the purchase price at settlement?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">You must still settle under the contract, and usually need to make up the shortfall yourself. Keep a funding buffer when you sign and talk to your lender well before settlement.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">I found leaks and cracks after moving in. Who can I go to?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Start by notifying the developer or builder in writing to fix them within the defects period; if unresolved, consider seeking help from the Building and Plumbing Commission, claiming under home warranty or the statutory warranties, and if necessary applying to VCAT.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">What should overseas buyers watch out for?<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Generally you need foreign investment approval and must pay additional taxes such as foreign purchaser duty; settlement may be years away, so plan fund transfers and finance early.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chua Tan Associates has practised in Melbourne since 1990, acting on property purchases and sales, conveyancing, building contracts and property disputes in Mandarin, Cantonese and English. Tan Chua has long handled property and commercial matters for Melbourne's Chinese community. For help, call 03 9602 3988 or contact us online. We can meet at our Melbourne CBD office or by video.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This page provides general information only and is not legal advice.<\/p>","protected":false},"excerpt":{"rendered":"<p>Off-the-plan contracts often take a year or two, or longer, to settle. Understanding sunset clauses, deposits and defect protections is the first step to protecting yourself.<\/p>","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_yoast_wpseo_meta-robots-noindex":"","_wpcom_ai_launchpad_first_post":false,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[23],"tags":[],"class_list":["post-16424","post","type-post","status-publish","format-standard","hentry","category-23"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v21.2 (Yoast SEO v28.7) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>\u7ef4\u5dde\u4e70\u697c\u82b1\uff1a\u65e5\u843d\u6761\u6b3e\u3001\u8ba2\u91d1\u4e0e\u7f3a\u9677\u987b\u77e5 - \u8521\u5e86\u4f1f\u5f8b\u5e08\u4e8b\u52a1\u6240<\/title>\n<meta name=\"description\" content=\"\u5728\u7ef4\u5dde\u4e70\u697c\u82b1\u524d\u8981\u770b\u61c2\u65e5\u843d\u6761\u6b3e\u300110%\u8ba2\u91d1\u4e0a\u9650\u3001\u4ea7\u6743\u56fe\u53d8\u66f4\u4e0e\u65b0\u623f\u7f3a\u9677\u4fdd\u969c\u3002\u672c\u6587\u89e3\u91ca2019\u5e74\u65e5\u843d\u6761\u6b3e\u6539\u9769\u540e\u53d1\u5c55\u5546\u89e3\u7ea6\u987b\u7ecf\u4e70\u5bb6\u540c\u610f\u6216\u6cd5\u9662\u547d\u4ee4\uff0c\u4ee5\u53ca\u7b7e\u7ea6\u524d\u8981\u67e5\u4ec0\u4e48\u3002\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/chuatan.com.au\/en\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"\u5728\u7ef4\u5dde\u4e70\u697c\u82b1\uff1a\u65e5\u843d\u6761\u6b3e\u3001\u8ba2\u91d1\u3001\u7f3a\u9677\u4e0e2019\u5e74\u6539\u9769\" \/>\n<meta property=\"og:description\" content=\"\u5728\u7ef4\u5dde\u4e70\u697c\u82b1\u524d\u8981\u770b\u61c2\u65e5\u843d\u6761\u6b3e\u300110%\u8ba2\u91d1\u4e0a\u9650\u3001\u4ea7\u6743\u56fe\u53d8\u66f4\u4e0e\u65b0\u623f\u7f3a\u9677\u4fdd\u969c\u3002\u672c\u6587\u89e3\u91ca2019\u5e74\u65e5\u843d\u6761\u6b3e\u6539\u9769\u540e\u53d1\u5c55\u5546\u89e3\u7ea6\u987b\u7ecf\u4e70\u5bb6\u540c\u610f\u6216\u6cd5\u9662\u547d\u4ee4\uff0c\u4ee5\u53ca\u7b7e\u7ea6\u524d\u8981\u67e5\u4ec0\u4e48\u3002\" \/>\n<meta property=\"og:url\" content=\"https:\/\/chuatan.com.au\/en\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\/\" \/>\n<meta property=\"og:site_name\" content=\"Chua Tan Associates\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/chuatanassociateslawyersmelbourne\" \/>\n<meta property=\"article:published_time\" content=\"2026-10-26T22:00:00+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/chuatan.com.au\/wp-content\/uploads\/2023\/08\/scott-graham-OQMZwNd3ThU-unsplash-1024x683.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1024\" \/>\n\t<meta property=\"og:image:height\" content=\"683\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Justin Chua \u8521\u667a\u52cb\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Justin Chua \u8521\u667a\u52cb\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\\\/\"},\"author\":{\"name\":\"Justin Chua \u8521\u667a\u52cb\",\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/#\\\/schema\\\/person\\\/76bc50f7a94d8325922ba9ff52570734\"},\"headline\":\"\u5728\u7ef4\u5dde\u4e70\u697c\u82b1\uff1a\u65e5\u843d\u6761\u6b3e\u3001\u8ba2\u91d1\u3001\u7f3a\u9677\u4e0e2019\u5e74\u6539\u9769\",\"datePublished\":\"2026-10-26T22:00:00+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\\\/\"},\"wordCount\":24,\"publisher\":{\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/#organization\"},\"articleSection\":[\"\u623f\u4ea7\u53ca\u5efa\u7b51\"],\"inLanguage\":\"en-AU\"},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/chuatan.com.au\\\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\\\/\",\"url\":\"https:\\\/\\\/chuatan.com.au\\\/buying-off-the-plan-victoria-sunset-clauses-deposits-defects\\\/\",\"name\":\"\u7ef4\u5dde\u4e70\u697c\u82b1\uff1a\u65e5\u843d\u6761\u6b3e\u3001\u8ba2\u91d1\u4e0e\u7f3a\u9677\u987b\u77e5 - 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