Industry leaders are warning that proposed changes to Queensland’s sunset clause laws could have serious consequences for builders and developers—potentially driving some to financial collapse. Others argue the reforms are long overdue to protect apartment buyers from exploitative practices.
In September, Queensland’s Attorney-General announced a review of the state’s sunset clause legislation, sparking strong debate across the property sector.
Sunset clauses allow either party in a contract to terminate an agreement if construction isn’t completed by a specified “sunset date.”
While developers in New South Wales and Victoria must obtain buyer or Supreme Court consent to enact such clauses, Queensland’s current rules still allow developers to unilaterally terminate off-the-plan home, unit, or townhouse contracts once the sunset date expires.
Many industry professionals agree there must be safeguards against developers exploiting sunset clauses to renegotiate or resell at higher prices. However, they caution that the current construction environment—with rapidly rising material costs and extended build times—requires a balanced, realistic approach.
There are also concerns that if a builder collapses mid-project, few would be willing to take over due to the risk of defect liabilities for work they didn’t complete.
Across Queensland, several partially completed projects remain idle because of these challenges, highlighting the fragility of the sector and the risks involved when a builder goes under.
Some experts have proposed new ways to navigate the issue.
One option could be short-term government-backed bridging finance to support projects until further sales or price adjustments can cover the gap.
Another potential approach could involve a government or independent body reviewing developer claims for cost increases—assessing construction data, feasibility reports, and cost justifications—to determine if limited renegotiation is fair and necessary.
While many developers face genuine cost pressures, there are also cases of misuse, and reform will need to strike a careful balance between oversight and practicality.
Consumer advocates have called for the government to extend protections to apartment buyers, including those purchasing under community title schemes and condominiums.
They argue that buyers who sign off-the-plan contracts in good faith are sometimes exploited by developers who use sunset or economic viability clauses to cancel contracts and resell at significantly higher prices.
While developers shouldn’t be forced to build at a loss, buyers deserve stronger protections from opportunistic cancellations and a more level playing field.
The housing industry points out that the cost of construction has soared dramatically in recent years.
For example, a townhouse that cost around $323,500 to build in 2021 might now cost more than $518,000. Industry representatives question who should bear that additional burden, warning that forcing developers to absorb it could push many to insolvency.
They stress that the issue isn’t about profit-chasing, but about survival in an unpredictable economic climate. Before COVID-19, such problems were virtually unheard of, but global supply chain disruptions and labour shortages have changed that reality.
Some have suggested a possible compromise—granting buyers the first right of refusal if a project must be repriced due to cost increases.
This could allow them to retain their opportunity to buy, based on updated valuations at completion, rather than having their contracts terminated altogether.
The review follows a petition by a Gold Coast resident whose townhouse contract was cancelled under a sunset clause earlier this year, along with several other buyers in the same development.
Public consultation for Queensland’s sunset clause review has now closed, and the industry awaits the government’s next steps.
