Off-the-Plan Sunset Clauses in Queensland: How They Work and How They Are Used Against Buyers

Off-the-plan contracts trade today’s price for tomorrow’s building. The clause that manages that gap - the sunset clause - is also the clause most capable of ruining the deal. Here is how sunset clauses work in Queensland, what changed in 2023, and the protection gap that still exists for apartment buyers.

What a Sunset Clause Does

A sunset clause gives either party a right to terminate if the plan of subdivision/building format plan is not registered (practically: construction not complete) by a fixed date. On termination, deposits are refunded. Sounds balanced - in a falling or flat market, it mostly is.

The Rising-Market Abuse

In a rising market the clause becomes a developer option: if prices rise faster than construction, cancelling old contracts and reselling at the new price is more profitable than completing the original sales - exactly what ss 19C-19F now prevent. ¹. Buyers who budgeted, financed and planned around the purchase are evicted from the deal with their deposit and no compensation - while an identical apartment now costs 20% more.

What Queensland Changed (November 2023)

The Land Sales Act 1984 (Qld) pt 4 div 4A - inserted with effect from 22 November 2023 - restricts sellers’ termination rights under sunset clauses for off-the-plan contracts for the sale of land: a seller can now only terminate with the buyer’s written consent or a Supreme Court order. ²

Key features of the new regime:

• Consent must be informed - the developer must give prescribed information (including the market context) and cannot pressure or mislead; consent obtained by undue influence, unconscionable conduct or misrepresentation can be set aside
• The Supreme Court can authorise termination where it is just - considering the developer’s reasons, delay causes, and the buyer’s position
• The court can order compensation where termination proceeds

The Gap That Remains

The reform targets scheme land. Standard-format lots (house-and-land subdivisions) and some other contracts may still sit outside the consent-or-court protection - and other states protect all off-the-plan buyers. Check which category your contract is in before assuming protection. ³; the contract’s own termination clause still governs where the Act does not.

Buyer-Side Sunset Rights

The clause cuts both ways: if construction drags and prices fall, the buyer can also terminate at sunset and walk. But think before you do - you negotiated that price for a reason, and the replacement property may not be better even in a soft market. Also check the interaction with your finance expiry: a contract that dies at sunset after your finance lapses leaves you exposed either way.

Practical Protections When Buying Off the Plan

1. Negotiate the sunset date - long enough to be realistic (construction delays are the norm), short enough to limit the developer’s option value
2. Ask for compensation wording - some developers agree that if they terminate, they pay interest on the deposit or a fixed amount
3. Watch variation powers - the right to change plans, finishes and common property can matter more than the sunset date
4. Finance expiry vs sunset - make sure finance approval outlasts the likely registration date
5. Valuation gap planning - banks value at today’s conditions, not contract price; know your exposure if values move (see our valuation gap FAQ)
6. Get the contract reviewed before signing - off-the-plan contracts are the most one-sided documents in residential conveyancing, and the review is the cheapest protection you will ever buy

• Sunset clauses FAQ
• Can a developer cancel my off-the-plan contract?
• Valuation gaps explained
• Off-the-plan and QCAT disclosure rights
• First Home Buyer’s Conveyancing Road Map

Reviewing an off-the-plan contract? Call Bell & Senior Lawyers on (07) 5532 8777 before you sign. General information only - not legal advice.

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