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Carter Capner Law has brought proceedings against a property developer over the alleged wrongful termination of 27 off-the-plan apartment contracts following a 40 per cent surge in unit values.
Editor’s note: This story first appeared on Lawyers Weekly’s sister brand, REB.
The legal action, lodged against Ivedon Street Pty Ltd, a company in the Dennis Corporation development group, claims the developer misused the contract’s “economic viability clause” to walk away from sales after the value of the units jumped by 40 per cent.
While the units were originally priced at $465,000, comparable recent sales suggest values closer to $800,000.
Peter Carter, director of Carter Capner Law, recently said that sunset clauses have been used to resell the dwellings at higher sums.
“Unscrupulous terminations are far more widespread than we know about,” Carter said. “In this case, all 27 buyers were misled by the developer.”
“They are entitled to the finished product or the difference between the contract price and what the finished product currently values at”.
The building, which was reportedly left half-completed, only recently saw construction works recommence.
Some buyers initially accepted a return of their deposits, but the legal action will represent the interests of the entire buyer group.
“Devasted buyers – many of whom are first-home purchasers – all face the same outcome,” he said. “After years of waiting, they are left homeless and priced out of a market that has moved dramatically beyond their reach.
“Some have sold existing homes in anticipation of moving into new apartments, only to find themselves scrambling for alternative accommodation — or unable to afford anything comparable at today’s inflated prices”.
Carter warned that such behaviour could be more widespread than reported, urging other off-the-plan buyers to seek legal advice when confronted with sunset clause terminations.
“Don’t take the developer’s word for it when you are told that the contract allows them to walk away from their obligations, as in many cases, they are just trying to take advantage of you, and you may lose hundreds of thousands of dollars of appreciation,” he said.
