Can a developer cancel my off-the-plan contract in Queensland?

A major fear for buyers entering the off-the-plan market is whether the developer can legally cancel their contract, refund their deposit, and resell the property for a higher price. On the Gold Coast, where property values have surged, this has been a controversial tactic.

Whether a developer can cancel your off-the-plan contract in Queensland depends primarily on what type of property you are buying.

Protections for Off-the-Plan Land Contracts

In November 2023, the Queensland Government passed significant reforms to the Property Law Act to stop developers from unfairly exploiting “sunset clauses” in off-the-plan land sales.

If you are buying a vacant block of land off the plan, the developer cannot automatically cancel your contract if they fail to settle by the sunset date. To legally terminate the contract, the developer must now:

1. Obtain your express written consent as the buyer, OR
2. Obtain a direct order from the Supreme Court of Queensland permitting them to terminate.

The Supreme Court will only grant such an order if the developer can prove that the delays were genuinely outside their control (such as extreme weather or unavoidable supply chain failures) and that continuing the contract would cause them unreasonable financial hardship. They cannot terminate simply because the land value has increased.

Risks for Off-the-Plan Apartment Contracts

Crucially, the 2023 protections do not apply to strata title properties.

If you are buying an off-the-plan apartment, unit, or townhouse governed by a Body Corporate on the Gold Coast, the developer generally retains the right to cancel your contract if they miss the sunset date.

In these contracts, sunset clauses are still enforceable. If construction is delayed and the specified date passes, the developer can legally terminate the agreement, refund your initial deposit, and resell the apartment at current market rates.

The Queensland Government is currently reviewing the Body Corporate and Community Management Act to see if these protections should be extended to apartment buyers, but as of now, strata buyers remain exposed.

What Should Buyers Do?

Before signing any off-the-plan contract, it is vital to have an experienced property lawyer review the fine print. You need to know:

• Exactly what the sunset date is.
• Whether the developer has wide rights to extend that date unilaterally.
• Your rights to terminate if the developer fails to deliver on time.

Off-the-plan contracts can run for hundreds of pages and are heavily weighted in favour of the developer. Never sign one without independent legal advice.

Related Topics

• What is a sunset clause in an off-the-plan contract in QLD?
• What is the valuation gap in an off-the-plan purchase?
• What is a Form 2 Seller Disclosure in Queensland?

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1. Property Law Act 2023 (Qld)
2. Body Corporate and Community Management Act 1997 (Qld)