Developers use these clauses to set a date when the contract will end. Buyers should be careful when a contract has a sunset clause as it can lead to the contract being terminated before the settlement date. Some developers may try to resell the same property to the buyer at a higher price after the contract expires. However, a sunset clause can protect both the buyer and developer – ie if the sunset clause date extends to say nine months after the expected completion date, and the development is completed within the extended period of nine months, then the buyer is obliged to settle and importantly, the developer cannot increase the purchase price.
In deciding whether this time frame is acceptable, it pays to consider how far advanced the development is when you sign the contract and what are the required future steps.Ask if the developer has obtained all of the approvals for the project to commence. If not, what still needs to be approved? Also, what documentation can the developer provide to demonstrate progress? To check on the progress of the development, your solicitor, settlement agent, or you can enquire with the developer, or its representative, if the milestones are being met within the necessary time periods under the contract.It will also pay to perform some checks on the developer. Ask if they have completed any other projects. If possible, visit some of the other projects and speak with the owners. Ask for their opinion of the developer and the quality of services provided.”