Carter Capner Law has launched proceedings against Ivedon Street Pty Ltd, part of the Dennis Corporation development group, over allegations it wrongfully terminated 27 off-the-plan apartment contracts after property values surged 40%.

Originally priced at $465,000, comparable apartments are now valued closer to $800,000. Director Peter Carter said buyers were misled by misuse of the contract’s “economic viability clause,” with developers allegedly walking away from sales to resell units at inflated sums.

“Unscrupulous terminations are far more widespread than we know about,” Carter said. “In this case, all 27 buyers were misled by the developer. They are entitled to the finished product or the difference between the contract price and what the finished product currently values at.”

Some buyers accepted a return of deposits, but the class action now represents the whole buyer group. Many are first-home purchasers who Carter says have been left “devastated, priced out of the market, and homeless” after years of waiting for completion of half-built units.

Carter warned that similar behaviour could be more common than reported and urged buyers to seek legal advice before accepting sunset clause terminations. “Don’t take the developer’s word for it,” he said. “In many cases, they are just trying to take advantage of you, and you may lose hundreds of thousands of dollars of appreciation.”

Full story / source:
Lawyers Weekly – Property developer facing class action over alleged misuse of sunset clause