Queensland took a significant step to protect consumers when laws around sunset clauses in off-the-plan land sales were reformed in 2023.
Under the changes, which were supported by the Queensland Law Society, developers could no longer terminate contracts due to a project being delayed.
Instead, these contracts can now only be terminated with the written consent of the buyer, or after obtaining an order from the Supreme Court.
The move ensures terminations were just and equitable to buyers, which is a clear consumer protection win.
But this critical protection measure stops short of where it is arguably needed most.
Off-the-plan apartment sales were exempted from these reforms. Buyers of off-the-plan lots in a community title scheme for apartments or townhouses remain exposed to the same risks the government sought to eliminate in land sales.
At the time the off the plan land sale reforms were introduced, we recommended the changes be applied to apartment sales as well.
We continue to reiterate this call. There is no logical justification for the distinction being made between off-the-plan apartment and land sales.
The Queensland Government recently announced a review of the 2023 sunset clause legislative reforms for ‘off the plan’ land contracts. While the review sought only public feedback via a survey on land contracts, we believe it is an ideal opportunity for the Government to consider extending the protections to apartment sales as well.
When the 2023 changes were introduced for land sales, the Government recognised the “power imbalance between buyers and sellers may leave buyers with little ability to negotiate changes. Many buyers also do not have the financial resources to pursue legal action against a seller in the event they believe the seller has used a contractual clause inappropriately.”
We believe the same applies to property sales.
You don’t have to look far to find media reports from this year alone where developers have invoked sunset clauses to cancel property contracts only to re-sell the same properties at significantly higher prices in a rising market.
The following examples have been reported in the media, with source links provided. While we haven’t independently verified each case, they illustrate the broader community concerns regarding sunset clauses:
- In June, a Brisbane developer was ordered to repay more than $6 million after cancelling a penthouse contract under a sunset clause and re-listing it at a premium.
- Earlier in the year, hundreds of apartment contracts were cancelled at a major Brisbane development due to cost blowouts, with developers seeking to reissue contracts at prices up to 12.5% higher.
- On the Gold Coast, a couple reported losing their Coomera townhouse contract in September, while in May, buyers in a 39-storey Main Beach tower were told to accept a 37.5% price increase or face termination. And in Carrara, some buyers were asked to pay up to $1 million more to retain their apartments—again under the threat of sunset clause termination.
Buyers in these situations are left with little recourse.
It is disappointing the current review does not consider extending the reforms to off the plan apartment sales, given the ongoing risks to consumers in a rising property market.
We remain hopeful that off the plan apartment sales will be considered in future stages of reform, given the clear need for greater consumer protections in this space.
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