Contents
Introduction
Off-the-plan sales remain a popular way to enter the NSW property market, but since the 2019 reforms, new challenges have emerged. Rising construction delays, financing pressures, and developer practices have prompted the NSW Government to launch a 2025 review aimed at strengthening consumer protections and reducing uncertainty for buyers.
Current Rules (2019 Reforms Still in Force)
- Disclosure Statement: Contracts must include draft subdivision plans, section 88B instruments, and proposed finishes.
- Cooling-Off Period: 10 business days for off-the-plan contracts.
- Deposits: Held in trust until settlement.
- Material Particulars: Purchasers can rescind or claim compensation (up to 2%) if significant changes occur.
- Sunset Clauses: Developers cannot rescind without purchaser consent or Supreme Court approval.
New Developments in 2025
- Mandatory Sunset Clauses: Buyers must have a clear right to withdraw if key milestones (lot creation, occupation certificate) are not met by a set date.
- Limits on Extensions: Developers can only extend sunset dates for reasons beyond their control (e.g., weather, supply chain issues).
- Disclosure of Milestones: Developers must provide updates on construction progress to reduce buyer uncertainty.
- Potential Penalties: Financial penalties may apply if developers fail to take reasonable steps to meet deadlines.
- Developer Flexibility: Minor changes (lot size up to 5%, finishes, parking allocations) remain permitted, but buyers are protected from “material prejudice”.
2019 vs 2025 Reforms Comparison
| Feature | 2019 Reforms | 2025 Developments |
|---|---|---|
| Cooling-off period | 10 business days | Same |
| Sunset clauses | Developer needs buyer consent or court approval | Mandatory buyer rights + stricter limits |
| Disclosure | Draft plans + finishes | Ongoing milestone reporting |
| Compensation | Up to 2% for material changes | Expanded rights for delays and prejudice |
Implications for Buyers and Developers
- Buyers: Greater certainty about timelines, stronger rights to exit contracts if projects stall, and clearer compensation pathways.
- Developers: Reduced ability to delay projects indefinitely; stricter compliance obligations and potential penalties.
- Market Confidence: These reforms aim to boost trust in off-the-plan purchases, encouraging more buyers to commit early.
FAQs
Can a developer still cancel my contract?
Only with your consent or Supreme Court approval, and stricter rules apply from 2025.
What happens if construction is delayed?
You may have rights to withdraw or claim compensation if milestones are not met.
Are minor changes allowed?
Yes, but only if they do not cause material prejudice (e.g., small lot size adjustments).
Conclusion
The 2019 reforms improved transparency, but the 2025 review goes further by tackling delays and tightening developer obligations. Off-the-plan buyers in NSW now enjoy stronger protections, while developers face stricter rules to ensure projects are delivered on time and fairly.
Lorri is a director of PDC Law. Lorri combines excellent technical expertise with a common-sense approach to best represent her clients. She is one of few Accredited Specialists in Commercial Litigation in the Illawarra and Shoalhaven. This accreditation is testament to Lorri’s expert knowledge and skill in dealing with commercial disputes. In 2019 Lorri was awarded Regional Lawyer of the Year by Women Lawyers Achievement Awards.
