Understanding Sunset Clauses In Queensland: What You Need To Know When Buying Off The Plan
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Buying property off the plan, before construction is complete or the title is registered, is a popular option for homebuyers in Queensland.
While it can be a great way to secure your property early (and usually more affordably), it comes with unique risks and legal considerations. One of the most important aspects to understand is the sunset clause.
Let's break down what sunset clauses are, how they work, the risks involved, and the key changes to Queensland property law that came into effect on 22 November 2023.
In This Article:
What Is An Off The Plan Purchase?
An Off The Plan (OTP) purchase means you enter into a contract to buy a property before it is built or fully registered. This could involve vacant land or a lot within a community titles scheme, such as apartments, townhouses or units.
Buying an OTP can offer benefits, like potentially lower prices and modern designs. However, there are risks, including:
not seeing the final product before purchase
construction delays or market fluctuations
contract clauses allowing the seller to cancel the contract under certain conditions
Because of these risks, independent legal advice is essential before signing any off the plan contract.
What Is A Sunset Clause?
A sunset clause is a contract term that allows either party, usually the seller or developer, to terminate the contract if settlement hasn’t occurred by a specific date, known as the sunset date.
For vacant land, the statutory sunset date under the Land Sales Act 1984 is 18 months from the contract date.
For Community Titles Schemes (CTS), such as apartments, townhouses and units, the statutory sunset period is up to 5.5 years in accordance with s 217B of the Body Corporate and Community Management Act 1997.
Sunset clauses are important because they protect parties from indefinite delays in settlement. However, historically, they have sometimes been misused by developers to terminate contracts and resell properties at a higher price, leaving buyers out of pocket.
Recent Changes To Sunset Clauses
On 22 November 2023, the Queensland Government introduced new reforms to strengthen buyer protections for off the plan land sales (vacant land, not apartments) under the Land Sales Act 1984. These changes were in direct response to concerns that developers could exploit sunset clauses to unfairly terminate contracts.
Key changes include:
Seller Termination Restrictions
Sellers can now only terminate a contract using a sunset clause if:
the buyer gives written consent, or
there is an order from the Supreme Court, or
another specific scenario prescribed by regulation.
Application To New And Existing Contracts
These rules apply to:
contracts signed but not settled by 22 November 2023.
new Off The Plan (OTP) contracts signed on or after 22 November 2023.
Deposit Protection
Sellers cannot access deposits before settlement. Deposits remain in trust and are only released once the contract is finalised or settled.
Community Titles Schemes (CTS)
The reforms do not apply to apartments or other CTS purchases, which still follow their statutory sunset dates and contract terms.
These reforms aim to prevent developers from unreasonably delaying settlement and then using sunset clauses to terminate contracts, protecting buyers who have already committed deposits and plans to build.
Other Legal Considerations For Off The Plan Purchases
Disclosure Statement
Before signing, the seller must provide a disclosure statement detailing:
seller and buyer details
the property or lot being purchased
proposed state of the land or unit, including orientation and total area
any planned earthworks or construction
A surveyor often certifies key sections of this statement, and you (as the buyer) must sign to acknowledge this document prior to signing the contract of sale.
Cancelling A Contract
As a buyer, you may have the right to terminate an Off The Plan (OTP) contract if:
there’s a material change to the property’s state from what was initially disclosed
the change causes a significant disadvantage (known as material prejudice)
You must act within 30 days of receiving a notice of the change or before the title transfers.
Failure To Settle
Under the Land Sales Act 1984, a buyer can terminate a contract if the seller fails to settle within 18 months for vacant land, provided the buyer hasn’t defaulted.
Why Legal Advice is Critical
Off The Plan (OTP) contracts are often hundreds of pages long and contain bespoke terms drafted by the developer’s solicitor, making independent legal advice essential.
Proper advice helps you fully understand how sunset clauses and statutory deadlines operate, ensures your deposit and settlement rights are protected, and confirms that important contract conditions are fair and reasonable. With the November 2023 reforms now in effect, getting proper and adequete advice is more important than ever, particularly if your contract was signed before the reforms or includes a sunset clause.
If you’re looking at buying Off The Plan (OTP), don’t leave your rights to chance. Contact our experienced property lawyers today for clear, practical advice and peace of mind before you sign.
Disclaimer: This publication is not intended to be comprehensive, nor does it constitute legal advice. We are unable to ensure the information is current and there is no guarantee in relation to accuracy. You should seek legal or other professional advice before acting or relying on any of the content of this publication. The views and/or opinions expressed in this publication is that of the author and may not necessarily represent the views and/or opinions of RHC Solicitors.
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