A bit of nasty, but legal business in Wellington. Developer claims they had to cancel and relist, or get liquidated.

On the ladder: First time buyer's dream home contract cancelled within weeks of move in date

Stuff by Mikaela Wilkes

A would-be first time buyer who was preparing to move into her dream home within weeks has been left devastated after the developer cancelled the sale and relisted the property for $90,000 more.

Bailey Ross paid the deposit for a two-bedroom, one-bathroom new-build in Tawa, in May 2019.

The $515,000 price was bang on budget and the developers, Tawa LLP, told the 25-year-old sales account manager she would be able to move in by the end of the year, early 2020 at the latest.

Ross had watched her home, one of 22 units in the outer Wellington suburb, be completed. "I could see them, they were practically ready," she said.

The end of 2019 came and went, and the BEO (buyer enquiry over) on the real estate listing for the houses rose to $535,000, then $565,000.

...But then Ross' realtor phoned her with the bad news. Tawa LLP had cancelled the purchase and would be returning her deposit, plus interest.

...A sunset clause in Ross' agreement permitted the cancellation.

Property law expert Joanna Pidgeon said a sunset clause under the Resource Management Act allows both parties to get out of an agreement if the build is not completed by a certain date.

"Sunset clauses are usually there for purchasers' benefit rather than vendors'," she said.

Ross and the developer had signed a sunset clause for September 2019, so either party could back out of the sale if the build was not completed by then.

When Ross' lawyer approached Tawa LLP for an explanation none was given, which isn't uncommon.

...Pidgeon's advice to other first time buyers is to beware of sunset clauses shorter than one-and-a-half, to two years.

"In genuine use, vendors have sunset clauses to get out when they can't finish a build in time," she said. "But it can also be an opportunity to get finance off the back of having you signed up, then terminate and sell for a higher price if the market is moving upwards."