Buying off-the-plan can be an exciting opportunity, but it’s crucial to understand the legal clauses that come with it. One key term that buyers should be aware of is the sunset clause. Recent changes in Queensland legislation have reshaped how these clauses operate, providing more protection for buyers.
What is a Sunset Clause?
A sunset clause is a provision in off-the-plan contracts that sets a deadline for project completion. If the development is not completed by this date, either party—typically the developer—may have the right to terminate the contract. The buyer’s deposit is refunded, but the deal is canceled.
While sunset clauses were originally designed to protect buyers from indefinite delays, some developers have used them strategically to terminate contracts and resell properties at higher prices due to market increases.
Recent Changes to Sunset Clause Laws in Queensland
To prevent unfair contract terminations, the Queensland Government introduced new legislation in November 2023, requiring developers to meet stricter conditions before invoking a sunset clause.
For off-the-plan flat land contracts, a developer or seller must now obtain either:
- The buyer’s written consent to terminate the contract, or
- A court order from the Supreme Court of Queensland approving the termination.
This reform aims to stop developers from taking advantage of rising property prices by canceling contracts and reselling at higher rates.
What About Apartments and Units?
For off-the-plan body corporate contracts, including apartments and units, the legal position remains unclear. The matter is currently under review by Parliament, and further legislative updates are expected in the next one to two years.
What This Means for Buyers
If you’re purchasing an off-the-plan property in Queensland, it’s essential to:
- Review your contract carefully and check the sunset clause conditions.
- Seek legal advice to ensure your rights are protected.
- Stay updated on future changes to body corporate contract laws.
Need Advice?
Understanding legal terms in property contracts can be complex. If you have concerns about your off-the-plan contract or sunset clauses, reach out to Ensure Legal for expert legal advice tailored to your situation.
