Off-The-Plan Unit Contracts At Risk

OPINION
by Tim O’Dwyer M.A., LL.B
Solicitor
Consumer Advocate
watchdog@argonautlegal.com.au

Conveyancing solicitors across Queensland have been anxiously scurrying to their filing cabinets to check settled and unsettled off-the-plan unit contracts following a surprise court decision. Serious repercussions could flow far and wide from this decision – not only for the state’s legal profession, but also for the local property development industry and the government.

Supreme Court Justice Kenneth Mackenzie’s decision in Bossichix v Martinek Holdings turned on whether the off-the-plan contract in question was fatally flawed.

The buyer’s solicitors relied on a technicality to cancel their client’s $995,000.00 purchase contract.  The developer not unexpectedly rejected the cancellation, then affirmed the contract and ultimately forfeited the buyer’s deposit.  The critical question in the ensuing court case was whether or not all off-the-plan contracts had to comply strictly with Section 212 of Queensland’s Body Corporate and Community Management Act 1997.

This Section requires such contracts to provide for settlement to be no sooner than 14 days after notice of the establishment of a development’s Community Management Scheme, otherwise buyers can cancel.

Although the developer’s legal team argued that this contract – read as a whole – substantially complied with the Section, the Court found that strict compliance was necessary.  Therefore the contract had been validly cancelled. 

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