A group of young families are furious after being told they may have to pay an extra $800,000 to $1 million for townhouses they purchased off-the-plan last year.

The buyers say they paid their deposits and signed the contracts in good faith. But these contracts have since been rescinded by a ‘sunset clause‘ contained within the contract.

In October of last year AMIA investments Pty Ltd bought the as-yet unbuilt units in Western Sydney’s Punchbowl from the original developers, Lynton Developments.

AMIA Investments then informed the contract holders it would be exercising its right to rescind the contract under a ‘sunset clause’ allowing either the buyer or seller to exit the deal if the units were not completed within a given time.

At a meeting with real estate agents the buyers were told that new contracts for the units would cost them an additional $100,000.

LJ Hooker, the realty responsible for selling the units, is set to lose $100,000 because of the dissolution of the original contracts.

Fair Trading NSW have said they would be willing to investigate any impropriety, but hold little hope of any positive outcome for the buyers.

“It is Fair Trading’s experience,” said a spokeswoman, “that most matter f this type turn on the conditions of the contract that the consumer has signed.

Consequently, their role is likely to be confined to whether there is any evidence of false or misleading representations having been made in the marketing of the property.”

“When markets are rising, developers can trigger the sunset clause to make the contracts null and void and resell the properties at higher prices,” said property analyst Terry Ryder, founder of Hotspotting.comau. “It doesn’t surprise me that it resurfaces from time to time.”

Christine Manolakos, principal of CM Lawyers, pointed out that it is very difficult to prove a development has been intentionally delayed so as to enact a sunset clause.

“The buyers would have to have evidence of that, get a statement from someone who worked on the site originally. It would be very hard to prove. It’s obviously unethical behaviour, but unfortunately there’s not much they can do,” she said.

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