A group of 34 home buyers have been priced out of Sydney's property market after their class action lawsuit was dismissed against a developer who tore up their contracts under a controversial "sunset clause".
The group of buyers had entered into off-the-plan contracts to buy units in a luxury apartment complex in Sydney’s Wolli Creek, but were left stranded when the developer rescinded their agreements.
The NSW Supreme Court ruled in favour of Kaymet Corporation, which cancelled contracts after a draft strata document was not registered before an agreed date. One of the original buyers told ninemsn he was shocked by the judgement and digesting what to do next.
“There are 34 homebuyers now who are basically priced out of the market and have lost the past five years of their lives,” he said.
“Ultimately I’ve probably wasted not just the last five years of my life, but the next five years to get back to where I was financially.
“When you consider legal costs I’ve effectively lost over $50,000.”
The first-home buyer said he had put a deposit on a two bedroom apartment with selling price of slightly over $500,000.
He said independent evaluators had reported the purchase price for the units had increased by at least $200,000 on the current market.
The units were originally purchased between 2009 and 2010 and a “sunset clause” allowed either party to rescind within two-and-a-half years if the building works had not been completed or the strata plan not registered before an agreed date.
The buyer said he was aware of the clause but believed it was “just the standard (contract)”.
“It’s definitely a bit of a warning story (for future investors), ” he said.
The Supreme Court dismissed the claims against Kaymet Corporation and said the 34 buyers had failed to establish a relevant breach of the contract.