Updated October 2026
Off the Plan Potential Problem 11
Off-the-plan purchases appeal to buyers who want to secure a property before construction is complete. However, settlement delays can disrupt moving plans, increase accommodation costs and leave finance arrangements out of date. A predicted completion date is not necessarily a contractual promise that you can move in on that day.
In NSW, your options depend on the contract, the reason for the delay and the statutory protections that apply. Before agreeing to an extension, accepting a cancellation or refusing to settle, check the consequences for your deposit. A delay does not automatically entitle either party to walk away.
Why off the plan settlements are delayed
Construction can take longer because of bad weather, material shortages, labour availability or problems requiring rectification. Council requirements, certification, service connections and registration of the subdivision or strata plan can also affect timing. Builder or developer insolvency may create further uncertainty, although the builder and the vendor named in your contract may be different companies.
Settlement is the completion of the sale, when the balance is paid and ownership transfers. For an off-the-plan apartment, the contract commonly links settlement to events such as plan registration and an occupation certificate. Ask which event triggers your obligation to complete, what notice must be given and whether the vendor can extend relevant dates.
The financial consequences for buyers
Extra rent, storage, moving expenses and temporary accommodation can build up during a delay. Buyers who have already sold their home may need somewhere to live for longer than expected. Investors may receive rental income later than planned. Keep records of these expenses, although reimbursement requires a legal basis and is not automatic.
Finance is another concern. An earlier loan approval may expire, and the lender may reassess income, expenses and the completed property's value. A lower valuation can increase the cash you need at settlement. Difficulty obtaining finance does not usually release you from an unconditional contract. Update your broker or lender as the project progresses.
For example, an extra 12 weeks of accommodation at $650 per week adds $7,800 before storage or moving expenses. This is an illustration, not an average loss. Work through your own budget and ask whether you could still complete if the timetable changed or your lender required a larger contribution.
The ABS Building Activity release for June 2026, published on 7 October 2026, includes average completion times for new apartments. Its completion times dataset records a NSW average of 10.54 quarters for 2025–26, approximately 31.6 months, compared with 9.54 quarters nationally.
These figures measure construction commencement to completion. They do not measure contractual settlement delays or the proportion of buyers losing deposits. They provide useful context for budgeting across an extended construction period, but cannot predict when a particular development will settle.
How sunset clauses protect buyers
A sunset clause deals with specified events not happening by a stated date, commonly plan registration or the issue of an occupation certificate. Check the actual clause and any extension provisions. An estimated completion date in marketing material may differ from the contractual sunset date.
Under section 66ZS of the Conveyancing Act 1919, a vendor proposing rescission under a sunset clause must give at least 28 days' written notice explaining the proposed rescission and why the sunset event has not occurred. Ordinarily, the vendor then needs each purchaser's written consent or permission from the NSW Supreme Court. The Court must be satisfied that permission is just and equitable in all the circumstances.
The NSW Government's off-the-plan guidance also warns that other contractual termination provisions may operate differently. Buyers do not need the same court approval to exercise their own valid sunset rights, but must comply with the contract. Do not assume a passed date automatically ends the agreement.
A real case involving delayed completion
In Silver Star Fashions v Dal Broi (2018), the NSW Supreme Court considered nine off-the-plan apartment contracts in Surry Hills. Their sunset date was 31 December 2016, but the strata plan was not registered until 23 January 2018. The vendor sought permission to rescind.
Justice Darke refused. Relevant considerations included the vendor's contribution to significant delays, the valuable contracts purchasers would lose and the absence of financial detriment to the vendor if the contracts continued. The proceedings were dismissed with costs payable by the vendor. The Court did not find that the vendor had deliberately manufactured the delays.
The case concerned former section 66ZL, which preceded the current section 66ZS safeguards. It shows why a missed sunset date alone does not decide a developer's entitlement to cancel. It does not establish an automatic compensation award or deposit refund for every delayed purchaser.
When your deposit is protected and when it is at risk
For contracts covered by the regime introduced on 1 December 2019, deposits and instalments must be held as trust or controlled money during the contract period. The Registrar General's guidance explains that these funds cannot be released to the vendor before settlement, protecting them against developer insolvency. Check who holds the money and obtain receipts.
That protection does not guarantee repayment following a buyer's default. If a buyer fails to complete and the vendor validly terminates, the deposit may be forfeited and further damages may be claimed. A lawyer should examine the settlement requirements, notices and termination before advising whether forfeiture can be challenged or repayment sought.
If repayment is disputed, identify the contracting vendor and the stakeholder holding the funds. A development's trading name may differ from the company legally responsible under the agreement. Keep a dated record of payments and requests for repayment. Before accepting a settlement offer, check whether its release terms would also prevent other claims.
Christine on a client seeking deposit recovery
I acted for a purchaser in a matter involving an off-the-plan development. She lost her deposit and is seeking to recover it. That recovery remains unresolved, and her entitlement to repayment still needs to be established.
It brings home how much can turn on the paperwork. My advice to anyone facing a deposit dispute is to gather the signed contract, payment receipts, notices and correspondence immediately. You need to understand the basis on which the money is being retained and the options for challenging it. Getting advice promptly gives you a clearer picture of what can realistically be done.
Steps to take when settlement is delayed
1. Obtain a written update. Ask what is outstanding, why progress has slowed and when the next milestone is expected. Keep the response with your contract and earlier communications.
2. Have your lawyer check the dates and notices. Review extension rights, sunset provisions and any proposed variation. For contracts within the 2019 disclosure regime, purchasers generally cannot be compelled to settle until at least 21 days after receiving the registered plan and associated documents.
3. Recheck finance and accommodation. Confirm lending requirements and allow a contingency for temporary housing. Avoid committing to a moving date based solely on an informal construction estimate.
4. Address changes quickly. Material changes to the disclosed property can create separate rescission or compensation rights if the legal tests are met. These include material prejudice and showing you would not have contracted had you known of the change. Relevant rights generally must be exercised within 14 days of notification or service of registered documents revealing the change.
5. Assess negotiation and legal action. An agreed extension, negotiated exit or mediation may resolve the dispute. Court proceedings require advice about the legal grounds, evidence and likely costs. A complaint or ongoing negotiation does not itself suspend contractual deadlines.
If your settlement is delayed or your deposit is at risk, contact CM Lawyers with the contract and latest notices. We can review the position and explain the available steps before you make a decision that affects your purchase.
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