Construction delays in new launch developments are not uncommon — particularly given the supply chain disruptions, labour shortages, and material cost pressures that have affected the construction industry in recent years. For buyers who have committed to a new launch and are counting on a specific TOP date for their living arrangements and financial planning, understanding what happens in a delay — and what your rights are — is important.
The Sales and Purchase Agreement And The Agreed TOP Date
When you purchase a new launch, the Sales and Purchase Agreement (SPA) will specify the expected date of vacant possession — the date by which the developer must complete construction and deliver the unit to you. This is not necessarily the same as the Temporary Occupation Permit (TOP) date; it typically follows the TOP by a few months as the developer processes individual handovers.
The SPA also typically specifies a Long Stop Date — the absolute latest date by which vacant possession must be delivered, usually 12 months after the original delivery date. This serves as the outer boundary of your exposure to delay.
Liquidated Damages
If the developer fails to deliver vacant possession by the agreed date, you are entitled to Liquidated Damages — typically calculated as 8% per annum of the purchase price, pro-rated for each day of delay. These are paid by the developer directly to you, either as a cash payment or as a credit against any outstanding amounts. They are not nominal — on a $2 million property, 8% per annum is approximately $438 per day, or $13,000 per month of delay.
What To Do If Your Development Is Running Late
Monitor construction progress through site visits and developer updates. Maintain flexibility in your rental arrangements if you're renting while waiting for TOP — avoid committing to a rental lease that assumes a specific move-in date without buffer. And ensure you're in communication with your agent, who can follow up with the developer on projected completion timelines. If the delay extends significantly, the SPA provides a framework for your rights — which your conveyancing lawyer can advise you on directly.