Law Firm Takes Aim at Apartment Sunset Clauses as Queenslanders Left Homeless by Opportunistic Developers

Hundreds of off-the-plan apartment buyers who have signed contracts and paid deposits are being exploited by “unscrupulous” developers who invoke “sunset” or “economic viability clauses” to terminate the contracts and resell units at vastly higher prices, resulting in them left without a home and priced out of the market.

While the Queensland Government acted in 2023 by passing laws to protect buyers of land and house/land packages from sunset clauses, it excluded apartments, condominiums and other community title schemes.

Peter Carter, director of Carter Capner Law and former national president of the Australian Lawyers Alliance, is advising many buyers caught out by terminated off-the-plan contracts and has called on the government to immediately extend the 2023 reforms to cover the apartment sector.

“While developers should not be forced to build at a loss, buyers who entered contracts in good faith deserve stronger protections to prevent opportunistic cancellations,” he said.

He said sunset clauses are increasingly being used by developers as legal levers to cancel in favour of re-selling units for far higher sums, and believes “unscrupulous terminations are far more widespread than we know about.”

Mr Carter said off-the-plan buyers who signed contracts years ago at Summerlin in Banyo received notification in February that the developer would terminate under the contract’s “economic viability” clause.

“Those that declined to accept the termination have been threatened with their deposits being sent off to the Public Trustee and bitter litigation, which will lead to them the losing the roof over their families’ heads if they have the temerity to contest the developer’s position.”

He also referenced the Midwater development at Main Beach, where “the developer has demanded purchasers pay an extra 37.5 per cent on top of their original purchase price or face termination under the sunset clause.”

He urged off-the-plan apartment buyers to obtain specialist legal advice if a developer seeks a sunset or economic viability termination.

“Don’t take the developer’s word for it when you are told that the contract allows them to walk away from their obligations, as in many cases they are just trying to take advantage of you, and you may lose hundreds of thousands of dollars of appreciation,” he said.

He also condemned property marketers and even lawyers who are dependent on the development industry for “turning a blind eye to the practice.”

“The Queensland Government acted to plug the problem for land sales, and now must act swiftly and decisively to extend those protections to all off-the-plan contracts.”