Sunset Clauses in Off-the-Plan Contracts
What happens if the developer does not finish on time
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Every off-the-plan contract has a sunset date: the date by which the plan must be registered, or the building finished. If that date passes, the contract can usually be ended. For years some developers used that to cancel contracts and resell at higher prices, and several states have since changed the law.
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What the law now says
| State | Can the developer end the contract under the sunset clause? |
|---|---|
| NSW | For residential off-the-plan contracts, only with the buyer's written consent or an order of the Supreme Court |
| Victoria | For residential off-the-plan contracts, only with the buyer's written consent or an order of the Supreme Court |
| Queensland | For off-the-plan land contracts entered into or still on foot from 22 November 2023, only with the buyer's written consent, a Supreme Court order or in a prescribed situation. These rules do not apply to lots in community titles schemes |
| Other states | Depends on the contract. Read the sunset clause carefully before you sign |
The buyer can usually still end the contract once the sunset date has passed, and get the deposit back.
What to check in an off-the-plan contract
- The sunset date, and whether the developer can extend it.
- What the developer can change: the size of the lot or unit, the floor plan, the finishes and the by-laws.
- The deposit: how much, who holds it, whether a deposit bond is accepted, and when it can be released.
- The disclosure statement and the draft plan, by-laws and budget for a strata or body corporate scheme.
- Defects, inspections before settlement, and what happens if the finished product is not what you were promised.
Cooling-off on off-the-plan purchases
In NSW the cooling-off period for off-the-plan residential contracts is 10 business days. Other states use their normal cooling-off periods. See cooling-off periods by state and buying off the plan.
What clients say
“Wisam at Optimum Lawyers recently helped me through the purchase of an investment property. He knows exactly what he's doing and what to look out for”
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Questions about sunset clauses
Can a developer cancel my off-the-plan contract in NSW?
Not under the sunset clause in a residential off-the-plan contract without your written consent or an order of the Supreme Court.
What happens to my deposit if the sunset date passes?
Usually you can end the contract and get the deposit back. Check the contract terms.
Do the Queensland rules apply to apartments?
The 2023 sunset clause rules apply to off-the-plan land contracts. They do not apply to lots in community titles schemes.
Can the developer extend the sunset date?
Some contracts allow extensions in limited circumstances. Read the clause before you sign.
Related: Contract of sale review | Strata lawyers | Property lawyers
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