Everything You Need to Know About Sunset Clauses

Everything You Need to Know About Sunset Clauses

Published on 23 Jun 2017

sunset clause is typically included in a contract of sale to provide protection for both the buyer and developer. 

Sunset Clause Description In every contract of sale for an off-the-plan property there is a sunset clause. It stipulates the maximum amount of time that the developer has to complete the project. The time frame will vary depending on the development and the size of the property among other factors. If the property has not been finished by the date stated on the contract you have a legal right to abandon the contract and reclaim your deposit in full.

Time Limits There are two time frames within a contract. One is the maximum amount of time the developer can take to complete the project. If all goes well they will generally finish well within this time. The second is the extended time frame which makes allowance for any major delays caused by funding problems, adverse weather conditions and industrial action. Before you sign the contract it is advisable to confirm with the developer whether or not they have obtained the required permits for the development. If there is any hold up in the planning process this can cause an extended delay.

What Are The Risks? Occasionally there are instances where a developer in a sharply rising market deliberately misses their deadline so the Sunset Clause is activated. This leads to the contract being cancelled and the deposit refunded. The developer can then attempt to sell the property at a higher price. Although you will get your deposit back, the increase in property prices means you can no longer afford a comparable property.

Research is Important When it comes to purchasing a property research is critical. Make sure that the developer has a good reputation and is trusted within the industry. Make sure they have successfully completed similar projects in the past. However, you should also keep in mind that it is a rare occurrence for a developer to default on the Sunset Clause. If you still have concerns after you have done your research it is advisable to get advice from a professional before making a decision.

Everything You Need to Know About Sunset Clauses

Everything You Need to Know About Sunset Clauses

Published on 23 Jun 2017

sunset clause is typically included in a contract of sale to provide protection for both the buyer and developer. 

Sunset Clause Description In every contract of sale for an off-the-plan property there is a sunset clause. It stipulates the maximum amount of time that the developer has to complete the project. The time frame will vary depending on the development and the size of the property among other factors. If the property has not been finished by the date stated on the contract you have a legal right to abandon the contract and reclaim your deposit in full.

Time Limits There are two time frames within a contract. One is the maximum amount of time the developer can take to complete the project. If all goes well they will generally finish well within this time. The second is the extended time frame which makes allowance for any major delays caused by funding problems, adverse weather conditions and industrial action. Before you sign the contract it is advisable to confirm with the developer whether or not they have obtained the required permits for the development. If there is any hold up in the planning process this can cause an extended delay.

What Are The Risks? Occasionally there are instances where a developer in a sharply rising market deliberately misses their deadline so the Sunset Clause is activated. This leads to the contract being cancelled and the deposit refunded. The developer can then attempt to sell the property at a higher price. Although you will get your deposit back, the increase in property prices means you can no longer afford a comparable property.

Research is Important When it comes to purchasing a property research is critical. Make sure that the developer has a good reputation and is trusted within the industry. Make sure they have successfully completed similar projects in the past. However, you should also keep in mind that it is a rare occurrence for a developer to default on the Sunset Clause. If you still have concerns after you have done your research it is advisable to get advice from a professional before making a decision.

Everything You Need to Know About Sunset Clauses

Everything You Need to Know About Sunset Clauses

Published on 23 Jun 2017

sunset clause is typically included in a contract of sale to provide protection for both the buyer and developer. 

Sunset Clause Description In every contract of sale for an off-the-plan property there is a sunset clause. It stipulates the maximum amount of time that the developer has to complete the project. The time frame will vary depending on the development and the size of the property among other factors. If the property has not been finished by the date stated on the contract you have a legal right to abandon the contract and reclaim your deposit in full.

Time Limits There are two time frames within a contract. One is the maximum amount of time the developer can take to complete the project. If all goes well they will generally finish well within this time. The second is the extended time frame which makes allowance for any major delays caused by funding problems, adverse weather conditions and industrial action. Before you sign the contract it is advisable to confirm with the developer whether or not they have obtained the required permits for the development. If there is any hold up in the planning process this can cause an extended delay.

What Are The Risks? Occasionally there are instances where a developer in a sharply rising market deliberately misses their deadline so the Sunset Clause is activated. This leads to the contract being cancelled and the deposit refunded. The developer can then attempt to sell the property at a higher price. Although you will get your deposit back, the increase in property prices means you can no longer afford a comparable property.

Research is Important When it comes to purchasing a property research is critical. Make sure that the developer has a good reputation and is trusted within the industry. Make sure they have successfully completed similar projects in the past. However, you should also keep in mind that it is a rare occurrence for a developer to default on the Sunset Clause. If you still have concerns after you have done your research it is advisable to get advice from a professional before making a decision.