Buying off the plan? Beware of sunset clauses

Sep.19, 2024

Among projects where huyers feel on shaky ground is Midwater at Main Beach [Gold Coast], where prices have swelled 88 per cent since buyers signed up 2021. A payment dispute has seen the builder leave the 119-unit project last week, with buyers worried the chances of completeion before the sunset date are slim.

Kathleen Skene, Gold Coast Bulletin Thursday 19, 2024

The statutory sunset date in Queensland is 5 and a half years after the contract is signed and allows a buyer to cancel the contract.

Developer Sunset Clauses

These sunset clauses will generally provide that either party can terminate the contract if settlement has not occurred by the sunset date. This is particularly important from a developer's perspective as the legislative provisions for the statutory sunset date only allow a buyer to terminate.

mullinslawyers.com.au

Another example from Main Beach Gold Coast -:

One off-plan Dune buyer, who signed up for $5.5m but had their contract cancelled by the developer, said their apartment had since been back on the market from $8.5m.

Kathleen Skene, Gold Coast Bulletin Thursday 12, 2024

The aptly named Dune, because it is sitting on a sand dune. This location was deemed a 3 storey maximum building height until the GCCC lost appeals in the land court.

Sunset clauses create a lucrative incentive for developers to cancel contracts and resell apartments at higher prices.

Governments reluctant to change Sunset Clause legislation

Neither side of state politics seems willing to address this issue.

Attorney-General and Justice Minister Yvette D'Arth said its changes to sunset clauses were intially limited to land to avoid putting "undue financial pressure on construction companies and developers who have been navigating volitile and fluctuating supply chanin issues and labour shortages since the pandemic".