The dreams of 47 potential homeowners have been dashed after a developer reneged on land sale contracts, leaving them priced out of the market.
Key points:
- The sales contract for 47 prospective buyers was terminated this week
- The developer, Intrapac, has used what it called a “sunset date” to cancel the sales
- Many buyers have waited three years for the land to be approved
Some of the buyers have been waiting for three years for Intrapac to develop Stage 10 of its Banyan Hill estate at Ballina on New South Wale’s North Coast.
But first homebuyer Oliver Ayo this week received the news that he did not have the land on which to build a home for his young family.
“I’m absolutely shattered. I still haven’t processed it properly.”
Since signing the contract in 2020, he and his partner Kelsey Banister have had a baby and were living in one bedroom off the side of her parents’ house.
“We held off having a baby for a year. We just held off on things, planned out life around [buying the land],” Mr Ayo said.
“We’ve both been working full-time jobs and extra hours trying to get our deposit together for when the land was ready.”
Mr Ayo said their patience had worked against them.
“I had just been dreaming of owning our home in our region [but] in the three years, prices have gone up so much, our blocks have probably doubled and we can’t afford to buy. We’re completely priced out,” he said.
He and his partner paid $306,000 for their 490 square metres block of land.
An equivalent size block of land in the same estate is now listed at $525,000.
In the email to purchasers, the developer Intrapac said it was able to cancel the contract due to a clause.
“Without a DA [Development Approval] in place at the time of the sale, the contract included a provision which made it conditional on receiving Development Approval within 18 months of exchange,” the email read.
In a presentation to the Ballina Shire Council last week, Intrapac said it would have to cancel the sales contracts for the buyers.
It also proposed changes to the DA.
“Changes to the layout have been required to satisfy requirements,” an Intrapac spokesperson said in the presentation.
Ballina Shire councillor Kiri Dicker understood Intrapac planned to increase the number of land blocks in Stage 10 from 70 to 90 lots.
The presentation also noted that the DA was submitted in February 2022, but Cr Dicker said it was not submitted until April 2022.
Mr Ayo signed his sale contract in September 2020.
The ABC has contacted Intrapac for comment.
Sunset clause protection
The potential buyers gathered at the estate this week to discuss their options.
Collectively they were refusing to take back their sale deposits and Ballina MP Tamara Smith was promising to take action against the developer.
“It beggars belief. We’re in the middle of a housing crisis and 47 families about to be, you know, virtually homeless,” Ms Smith said.
“I don’t understand how they could be allowed to buy properties off the plan, and that not be honoured, and so I’ll certainly be raising those questions with the developer and also with the [NSW] Minister for Planning.”
Cr Dicker believed the aggrieved buyers had rights under sunset clause legislation.
“My understanding is that you’re entitled, you can challenge a sunset clause now in the Supreme Court,” he said.
“That came in around 2015, so I absolutely encourage you all to talk to your conveyancer or a lawyer to pursue what options there are.”
A fair call?
In a letter to one of the buyers, lawyers for the developer said the “Development Consent Sunset Date was 11 May 2022”, just a month after Cr Dicker said the DA was lodged.
A NSW Department of Fair Trading spokesperson outlined the protection of sunset clauses.
“Sunset clause provisions prevent developers cancelling contracts before registration of the plan and selling the same property to new buyers at a higher price,” the spokesperson said.
“Since 2019, off-the-plan contracts must include a disclosure statement explaining conditions of the contract, including the sunset date and other circumstances under which the vendor can cancel the contract before settlement.
“Under the Act, developers must apply to the Supreme Court for approval before cancelling contracts using sunset clauses, unless the buyer agrees. This is not required for conditions other than sunset clauses.”
Those affected by the sale terminations could contact the department with details, documents and letters so it could assess if action was warranted against the developer.
Forty-seven ‘super young’ families
As Mr Ayo holds his baby, he also holds hopes the developer will honour the sale.
“I just hope, morally, they will take a look at what they’re doing,” he said.
“There’s potentially 47 families here today, and everyone looks super young and we’re just all trying to do our best and start life here.
“We’ve all waited three, at least three years, since we first made initial contact about getting the block.
“It’s been a long, long time. We’ve been through a lot through COVID and the inflation of everything. Everyone’s struggling and it’s just a really hard time.
“So I really hope that they realise what they’re going to do to so many young local families.”
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