Sunset Clauses were introduced to help protect investors who buy off the plan, in the case of inordinate delays.

A Sunset Clause allows either party to call the deal off, if construction is delayed beyond a certain length of time and normally, the buyer would be able to recoup their deposit.

Buying off the plan appeals to sophisticated investors who can wait and tolerate risk in a rising market.

The appeal of this type of investment is that the price of the development will have risen, by the time the development construction is completed.

Along with the risk of the project being abandoned, often buyers discover that the completed project bears little resemblance to the product they initially signed up for.

Often developers will insert a clause in the contract that permits the builder to vary the footprint of the unit by a certain percentage.

Recently, some developers have deliberately delayed construction in order to claw the unit back for resale at a much higher price.

The buyer will recoup the deposit but is not compensated for lost time and effort and suffers the inconvenience, of being robbed of an investment opportunity.

If you are considering buying off the plan, it pays to get independent legal advice before signing any contracts.

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