Qld makes good on sunset clause crackdown

In sales contracts for dwellings that are purchased before the project has been built, a sunset clause provides a party with the right to terminate if the contract is not settled within a particular time frame.

The Queensland government is now proposing amendments to its legislation around land sales to strengthen consumer protections for “off-the-plan” residential property contracts.

With property prices on the rise, supply issues eating away at the margins for builders and construction times blowing out, some evidently saw sunset clauses as a way to use the challenging market conditions to an unfair advantage.

The Queensland government became aware of a number of reports of developers invoking a sunset clause to terminate an off-the-plan contract, allegedly in order to re-list and sell the proposed lot for a much higher price.

The legislative changes intend to ensure property developers can only invoke a sunset clause to terminate off-the-plan contracts for land with the written consent of the buyer, as an order of the Supreme Court, or in other limited scenarios.

These changes follow on from a consultation period in which consumers and property developers were invited to complete an online survey on the issue, and peak bodies were invited to provide written submissions.

Shannon Fentiman, the state’s Attorney-General and Minister for Justice, said the adjustments were needed to ensure Queensland buyers were protected when they purchased land off the plan.

“We know property law is a complex and technical area that differs between states and territories, and we have listened to home buyers and property developers to ensure these changes reflect both party’s needs.

“Buying a home is one of the biggest decisions and investments a Queenslander will make in their lifetime, and we want to ensure they are protected and the process is fair.

“I am pleased to announce that work has started on law reforms that will better protect Queenslanders when entering a contract for the ‘off-the-plan’ sale of land,” Ms Fentiman said.