Sunset clauses appear in off-the-plan land contracts and can catch buyers off guard. The clause names a date by which a particular event, such as the registration of the plan of subdivision or settlement itself, must happen. If it does not, one or both parties may have the right to end the contract.
What surprises many buyers is that Queensland's Land Sales Act limits when a seller can use a sunset clause to exit a contract. A seller generally cannot end an off-the-plan land contract through a sunset clause automatically. The process requires either the buyer's written consent or a Supreme Court order, according to Queensland's Land Sales Act. Understanding what a sunset clause does, and what it cannot do, is the first step in reading an off-the-plan contract clearly.
Our lawyers in Springfield help clients across Greater Springfield and Ipswich with off-the-plan purchases and land contract reviews.
Here's how sunset clauses generally work in Queensland, and what the rules mean for buyers and sellers.
Key takeaways
- A sunset clause sets a deadline for a key event in an off-the-plan contract.
- Sellers cannot use one to exit a land contract automatically.
- Queensland's Land Sales Act limits a seller's right to end under a sunset clause.
This article is general information only and is not legal advice. Every situation is different, and you should speak with a solicitor about your own circumstances.
What is a sunset clause in a Queensland off-the-plan contract?
A sunset clause is a term in an off-the-plan land contract that names a date, called the sunset date, by which a stated event must occur, according to Queensland's Land Sales Act. Common events are the registration of the plan of subdivision, the creation of a separate title for the lot, or settlement itself. If the event does not occur by that date, the clause may allow the contract to be ended.
Sunset clauses were originally designed to protect buyers, giving them a way out if a developer's project ran significantly over time. Over time some sellers began using them in rising markets to exit contracts and resell at a higher price. Queensland's Land Sales Act now restricts how a seller may rely on one.
When does a sunset clause not protect the seller?
A sunset clause cannot end an off-the-plan land contract automatically where the seller wants to use it, according to Queensland's Land Sales Act. A seller who wants to end the contract under a sunset clause must first give the buyer a written sunset clause notice at least 28 days before the sunset date. After that, the seller still needs either the buyer's written consent or a Supreme Court order before the contract can end.
The buyer is not required to consent. The Act says the buyer must act reasonably and respond by the day before the sunset date, but not responding is not treated as consent. If the buyer refuses, the seller must apply to the Supreme Court.
The Supreme Court may allow a seller to end the contract only if it is satisfied the termination is just and equitable. In deciding that question the Court must consider, among other things, whether the seller acted unreasonably or in bad faith, the effect of the termination on the buyer, and whether the land has increased in value since the contract was signed.
What events does a sunset clause typically cover?
Queensland's Land Sales Act identifies three events a sunset date may relate to:
- › Registration of the plan: the survey plan for the subdivision must be registered with Titles Queensland by the sunset date.
- › Creation of a separate title: a separate title for the lot must be created by that date.
- › Settlement: the contract must settle by the sunset date.
The Land Sales Act also sets a separate rule: a seller must settle no later than 18 months after the contract is signed, other than because of a buyer's default. If that deadline passes without settlement, the buyer may terminate the contract by written notice before settlement occurs, according to Queensland's Land Sales Act.
How does a solicitor help buyers with sunset clause contracts in Queensland?
Reviewing an off-the-plan land contract before signing is the clearest way a solicitor adds value in this area. Our conveyancing team checks the sunset date and the trigger event, confirms what the contract says about the seller's notice obligations, and explains what the buyer's rights are if the date approaches without settlement.
Step 1: Talk to us
Get in touch and we'll explain how sunset clauses generally work and what to look for in a proposed contract before you sign.
Step 2: Review the contract
We read the sunset clause carefully, including the trigger event, the sunset date and any notice provisions, and explain what each term means in plain words.
Step 3: Advise on your position
We explain how the Land Sales Act applies to the contract, including the seller's notice obligations and what consent or a court order would mean in practice.
Step 4: Manage the process to settlement
We monitor the key dates, keep you informed as the sunset date approaches, and deal with the other side on your behalf if an issue arises.
| Get in touch Need help with an off-the-plan contract? We're an experienced team who keep you well informed at every stage of the process. Get in touch to discuss your needs. |
What does the sunset clause reform not cover?
The 2023 sunset clause reforms that restrict seller-initiated terminations apply to off-the-plan land contracts under Queensland's Land Sales Act. They do not extend to lots in community titles schemes, such as apartment buildings, according to the Queensland Government. They also do not apply to sunset clauses in linked or single house-and-land contracts.
This means buyers of off-the-plan apartments in Queensland cannot rely on the same protections. A buyer looking at an apartment contract should check the sunset date terms with a solicitor, because different rules apply.
"The sunset clause rules in Queensland treat land contracts and apartment contracts differently. A buyer signing an off-the-plan land deal has legislative protections a buyer signing an apartment contract does not."
Jade Kickbusch, Principal, Brookwater Legal
What other protections does Queensland's Land Sales Act give buyers?
Beyond the sunset clause rules, Queensland's Land Sales Act gives buyers several protections when purchasing a proposed lot:
Before the contract is signed, the seller must provide:
- › Disclosure statement: a signed document identifying the seller and buyer, recording details about the proposed title, and including a disclosure plan with the lot's dimensions, area and orientation, plus a section completed by a cadastral surveyor.
- › Material prejudice right: if the disclosure becomes inaccurate and a buyer would be materially prejudiced if made to complete, the buyer may terminate by written notice before settlement, within the period the Act sets after the seller's further statement.
- › Registered plan and surveyor's statement: unless the buyer already had an approved plan before signing, the seller must give the registered plan and a cadastral surveyor's statement confirming it matches the disclosure plan at least 14 days before settlement. If not, the buyer may terminate.
- › Deposit protection: money paid before settlement goes directly to the law practice or real estate agent named in the contract, or otherwise to the public trustee. The Act also provides for a security instrument such as a bank guarantee. Where the buyer terminates under the Act's rules, the seller must repay the money and any interest within 14 days.
Frequently Asked Questions
What is a sunset clause in a Queensland property contract?
A term naming a date by which a stated event, such as the registration of the plan or settlement, must occur, according to Queensland's Land Sales Act. If it does not, the contract may be ended in the circumstances the Act allows.
Can a seller in Queensland end a contract using a sunset clause without the buyer's agreement?
Generally not, according to Queensland's Land Sales Act. The seller must give written notice at least 28 days before the sunset date, and then needs either the buyer's written consent or a Supreme Court order.
Do the Queensland sunset clause reforms apply to off-the-plan apartments?
No. The Queensland Government confirms the 2023 reforms apply to off-the-plan land contracts only. Lots in community titles schemes, such as apartments, are not covered, so different rules apply to those contracts.
When must an off-the-plan land seller settle in Queensland?
No later than 18 months after the contract is signed, other than because of a buyer's default, according to Queensland's Land Sales Act. If that deadline passes, the buyer may terminate by written notice before settlement.
What does the Queensland Supreme Court consider when a seller applies to end a contract under a sunset clause?
Whether the termination is just and equitable, including whether the seller acted in bad faith, the effect on the buyer, and whether the land has increased in value, according to Queensland's Land Sales Act.
Do you need a solicitor to review an off-the-plan contract in Springfield or Ipswich QLD?
A solicitor checks the sunset date, the trigger event and the notice provisions before you sign. For buyers in Springfield, Ipswich and across Greater Springfield, the Brookwater Legal conveyancing team can review the contract and explain what the terms mean.
What happens to a buyer's deposit if an off-the-plan land contract ends under a sunset clause in Queensland?
Where a buyer terminates under the rules Queensland's Land Sales Act sets, the seller must repay the money paid and any interest it earned within 14 days, subject to trust account law.
Your Next Steps
Off-the-plan land purchases involve longer timeframes than standard property contracts, and the sunset clause is one of the terms most worth understanding before signing. For buyers in Ipswich and across Greater Springfield, reading the contract carefully before committing can make a significant difference to how the purchase unfolds.
Every off-the-plan contract is different, and that's exactly why it's worth a conversation. Make an appointment with the Brookwater Legal team or call (07) 3437 8555.
 |
External Resources
Brookwater Legal · This article contains general information only and does not constitute legal advice. It does not take into account your individual circumstances. You should obtain legal advice about your own situation before acting on anything in this article. Liability limited by a scheme approved under Professional Standards Legislation.
