Queensland Homebuyers Face Ruin as Developers Exploit ‘Sunset Clauses’
A growing number of Queensland homebuyers are locked in legal battles with developers after contracts were terminated due to expired ‘sunset clauses,’ leaving families financially devastated and dreams of homeownership shattered.
More then half a decade ago, Fatin jebeili and Maher santina envisioned a life on Queensland’s Gold Coast. On their honeymoon, teh couple fell in love with the region and resolved to leave Sydney behind, hoping to one day call it home. In 2022, that dream seemed within reach when they placed a deposit on a four-bedroom, off-the-plan townhouse for $595,000. Three years later, the Santina family finds themselves in a nightmare scenario: their home remains unfinished, and the developer, Urbana Residences, is attempting to cancel their contract and return their deposit, citing an expired sunset date.
the couple, along with their two daughters, are still renting in Sydney, having been priced out of an increasingly competitive property market. “Even if we go more remote in Sydney or in [the] Gold Coast or anywhere… it’s going to be a struggle,” Mr. santina said,expressing a sense of desperation. while parts of the Urbana Residences growth are nearing completion,the delays have taken a notable emotional and financial toll.
What are Sunset Clauses?
Sunset clauses are standard provisions in off-the-plan property contracts that allow either the developer or the buyer to terminate the agreement if construction isn’t completed and settled by a specified date. However, buyers at Urbana Residences allege that developer Cadmium Land FW2 Pty Ltd deliberately stalled construction to exploit the sunset clause and resell the properties at current market values, now significantly higher than what buyers originally paid. “they’ve basically built the later stages, and left our stage out,” Ms. Jebeili explained. “They’ve gone out of the market now.”
Legal Action Looms
Approximately 20 Urbana residences buyers are preparing to launch legal action against Cadmium Land FW2 Pty Ltd, alleging breach of contract. Duke Myrteza, a solicitor at Australian Law Partners representing the buyers, claims the developer manipulated the construction schedule, prioritizing later stages of the development to allow the sunset date to pass. “ultimately, all we need to establish is a breach on the part of the developer in terms of its obligations under the contract,” Myrteza stated.
In a letter to Myrteza, lawyers representing the developer strongly denied the claims of intentional delays, stating that the construction delays were not attributable to “neglect” or a lack of diligence. They also rejected allegations of failing to pay subcontractors or breaching contractual obligations,claiming the buyers’ allegations lacked “evidence” and were made in “broad and sweeping terms.”
calls for Legislative Reform
The situation at Urbana Residences has ignited a push for legislative reform in Queensland. Samuel Amey recently lodged a petition with the state government, garnering over 1,700 signatures, urging a review of sunset clause legislation to align with other states, notably New South Wales. Currently, Queensland offers greater protections to buyers of off-the-plan land than to buyers of off-the-plan properties. The state government announced a review of the legislation in September, following amendments made in 2023 under the former Labor government.These changes require developers to obtain written consent from buyers or a Supreme Court order to terminate an off-the-plan land contract using a sunset clause. However, these protections do not extend to off-the-plan property sales, leaving buyers like those at Urbana Residences vulnerable.
Attorney-General deb Frecklington acknowledged the disappointment experienced by those affected by sunset clause terminations, stating that the government is undertaking an “in-depth review” of the existing amendments and seeking input from stakeholders.
Despite the uncertainty, Ms. Jebeili remains hopeful that legislative changes will prevent others from experiencing the same hardship. “I hope there is light at the end of the tunnel, even if it didn’t work out for us,” she said. “At least… I hope that some laws can get reviewed and help someone else.”
