Hillview Estate Maudsland: Gaven MP Meaghan Scanlon promises to raise sunset clauses issue with AG
Gaven MP and Minister for the Environment Meaghan Scanlon has promised to raise the issue of sunset clauses in land sales with Attorney-General Shannon Fentiman after first home buyers had their contracts torn up.
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GAVEN MP and Minister for the Environment Meaghan Scanlon has promised to raise the issue of sunset clauses in land sales with Attorney-General Shannon Fentiman after first home buyers on the Gold Coast had their contracts torn up.
The buyers, at Hillview Estate in Maudsland, had their contracts terminated after developer Metacap Developments invoked an 18-month sunset clause citing issues caused by adverse weather, the presence of rock and delays securing council approvals.
The Bulletin has since learned that similar clauses have also been used to terminate contracts at developments in Brisbane and the Sunshine Coast.
The use of such clauses is not prohibited under Queensland law, which has led to calls for Ms Fentiman to amend legislation.
Minister Scanlon told the Bulletin she sympathised with affected buyers at the Hillview Estate, which lies just outside her Gaven constituency, and would raise the issue with her cabinet colleague.
“We are absolutely looking at what we can do and I certainly feel for people who went and tried to buy a property and are being told that they no longer have that property and things have changed,” Ms Scanlon said.
“I totally understand the situation they are in.“I am happy to have a conversation with the Attorney General as a local MP.
“I know she is looking at what other jurisdictions have done. These issues have been presented in NSW where I think they have made some changes.
“So absolutely, I think it’s reasonable that if there’s an issue that we look at what the problem is and see if we can address it and I’m more than happy to raise it on behalf of people.”
Theodore MP Mark Boothman, whose constituency includes Hillview Estate, has suggested Ms Fentiman amends the Queensland Land Act 1984 in the same way equivalent NSW legislation was amended in 2015.
Ms Fentiman last week wrote to Mr Boothman to say the Office of Fair Trading would be undertaking “awareness activities” regarding contracts for off-the-plan sales and the government was examining changes made in other states.
“The Government will continue to monitor the issue and responses recently adopted by other jurisdictions to ensure it is fully informed when determining future policy,” Ms Fentiman said.
PREVIOUSLY: MP'S ANGER OVER AG RESPONSE
THEODORE MP Mark Boothman has slammed the response of Attorney-General Shannon Fentiman to concerns about the use of “sunset clauses” in property contracts, saying she is “missing the point.”
Mr Boothman in December wrote to Ms Fentiman proposing that Queensland legislation be amended to bring it into line with NSW, where the use of sunset clauses by developers was restricted in 2015.
Mr Boothman’s appeal came after revelations that buyers at the Hillview Estate in Maudsland had their contracts terminated by Metacap Developments after the expiry of an 18-month sunset clause.
The move left buyers distraught – but is not prohibited under Queensland law.
Ms Fentiman said she could “appreciate the disappointment for buyers” and would ask the Office of Fair Trading to “raise consumers’ awareness” about the issue, but stopped short of promising any changes to legislation.
“The government is monitoring the issue and responses recently adopted by other jurisdictions,” Ms Fentiman said.
“ ‘Sunset clauses’ are not part of the standard REIQ approved contract. For this reason I strongly encourage anyone considering buying residential property to obtain independent legal advice before signing a contract, especially when a contract includes added conditions.
“The Office of Fair Trading (OFT) will continue to advise Queensland consumers to carefully read terms of their contracts and be aware of what they are signing when purchasing.
“I have asked the OFT to raise consumers’ awareness about this to ensure more Queenslanders are protected when entering into contracts of this nature.”
Mr Boothman said Ms Fentiman’s response gave no comfort to affected buyers and has again written to her pleading for action to be taken to close what he called a “legal loophole”.
“Unfortunately your letter misses the entire point being emphasised by Queenslanders who purchase ‘off the plan’ homes,” he wrote.
“Your sympathies are welcome but give little comfort to the many families affected by this legal loophole.
“We all agree that buyers need to thoroughly read their contracts carefully, nonetheless I am sure you would concur when one party enters a contract there is an expectation the contract should be honoured unless uncontrollable and unforeseen circumstances prevent this.
“... Simply raising awareness through the Office of Fair Trading does not alleviate the actions of a small group of ‘off the plan’ developers.
“... Tabling legislation in the Queensland parliament that prevents this practice is the surest way to give balance for the rights of both the buyer and sellers and I call on you to enact such legislation.”
A petition to the Queensland Parliament launched on Monday calling for changes to legislation “as a matter of urgency”.
The petition closes at the end of February.
WARNING OVER CLAUSE IN PROPERTY CONTRACTS
ATTORNEY-GENERAL and Minister for Justice Shannon Fentiman has warned property buyers to be wary of contracts including so-called sunset clauses after controversy over their use at a Gold Coast development.
The Bulletin last month revealed how Metacap Developments had used a sunset clause to tear up contracts of first-home buyers to buy land at the Hillview Estate in Maudsland.
The clause can legally be invoked by the buyer and vendor if settlement has not been achieved 18 months after signing.
Distraught purchasers said it left them tens of thousands out of pocket due to the sharp rise in Gold Coast property prices in the 18 months since they had signed deals. Some had paid deposits to builders and other suppliers.
Queensland law doesn’t prohibit such clauses.
“I can appreciate the disappointment for buyers if a seller terminates an ‘off the plan’ sales contract,” Ms Fentiman said. “The government is monitoring the issue and responses recently adopted by other jurisdictions.
“‘Sunset clauses’ are not part of the standard REIQ approved contract. For this reason I strongly encourage anyone considering buying residential property to obtain independent legal advice before signing a contract, especially when a contract includes added conditions.
“The Office of Fair Trading (OFT) will continue to advise Queensland consumers to carefully read terms of their contracts and be aware of what they are signing when purchasing.
“I have asked the OFT to raise consumers’ awareness about this to ensure more Queenslanders are protected when entering into contracts of this nature.”
The use of sunset clauses has been restricted in NSW and Victoria.
Theodore MP Mark Boothman in December wrote to Ms Fentiman asking legislation in Queensland be amended to bring it into line with NSW.
“In 2015 the NSW Government made legislative changes to the NSW Conveyancing Act 1919 that require a purchaser to give consent in writing to the recession of a contract,” Mr Boothman wrote.
“Additionally, it gives the vendor the ability to obtain an order of the Supreme Court to rescind the contract, providing protections to both stakeholders.
“Recently this legislation has been tested in the NSW Supreme Court ... Justice Rowan Drake ruled in the case the developer did not act equitably in seeking to rescind contracts and dismissed the developer’s bid to tear up off the plan contracts.
“Justice Drake also ordered the developer to pay legal costs of all buyers involved in the dispute.”
Mr Boothman, whose constituency includes Maudsland, has not yet had a response from Ms Fentiman. He told the Bulletin he was sponsoring a petition organised by local residents in support of the law changes.
It was “overdue”, Mr Boothman said: “Queensland buyers are just seeking similar protections that our southern home buyers enjoy.”
In letters to Hillview Estate buyers informing them their contracts were being cancelled, Metacap Developments said it had suffered unexpected delays caused by rain, presence of rock and council approval issues.
Council denies responsibility for delays. On Friday, in response to a request for an update from Cr Peter Young, the Executive Coordinator Contributed Assets and Development Compliance said “nothing” had changed since December.
“There is no application with the City currently for plan sealing,” they wrote. “The civil construction works are not yet on-maintenance, nor are they bonded.
“The landscaping works are not yet on-establishment, nor have they bonded the works.”
Metacap Developments did not respond by deadline.
WHAT DEVELOPER IS NOW CHARGING FOR LAND AT HILLVIEW ESTATE
Land at a new homes development where buyers had their contracts torn up is now selling at prices more than $100,000 higher than originally sought.
More than a dozen prospective purchasers at the Hillview Estate in Maudsland had their contracts cancelled in the weeks before Christmas.
In letters to the buyers, developer Metacap invoked a sunset clause which allows either party to walk away from the contract if settlement has not been achieved 18 months after signing.
Metacap cited issues caused by weather, rock found at the site and delays with council inspections for failing to have the sites ready by the 18-month deadline.
Council officers have since denied contributing to the hold-ups.
Emails from the developer seen by the Bulletin reveal sites at the estate which were originally priced between $280,000 and $300,000 are now being offered for sale at prices ranging between $400,000 and $450,000.
The land is no longer being marketed via Brisbane real estate agency Julie Harris Realty, which previously listed Hillview Estate on its website.
It is instead now being sold directly by the developer.
The Bulletin has also learnt that since breaking news of the controversy in mid-December, several more prospective buyers at Hillview Estate have received letters terminating their contracts.
The letters were sent days before Christmas to purchasers whose sunset clauses fell due on a range of dates over the holiday period.
Buyers told the Bulletin receiving the letters so close to Christmas had left them distraught.
“My wife could not stop crying and shaking,” one told the Bulletin.
“That’s the distress it caused her, literally a couple of days before Christmas.”
The Bulletin also understands a number of buyers at another Metacap development at The Gap in north Brisbane have also received letters informing them that their contracts were being terminated due to the expiration of a sunset clause.
The use of such clauses to terminate contracts is not prohibited by Queensland law.
Theodore MP Mark Boothman, whose constituency includes Maudsland, said the situation had “destroyed” Christmas for many families and called for Queensland legislation to be changed to outlaw the practice.
“Understandably, families affected by the actions of this developer are devastated and are in disbelief,” Mr Boothman said.
“At that time of year, we should all be celebrating and spending time with our families. The actions of developers have destroyed the festive Christmas cheer for many families.
“A contract between buyer and seller should be honoured.
“ … What is needed now are robust laws similar to those passed in NSW in 2015 as a matter of urgency. These laws have been tested in court and are proven to protect the interest of both buyers and vendors and put an end to this behaviour.”
The Bulletin has again attempted to reach representatives of Metacap Developments for comment. No response was forthcoming at time of publication.
Originally published as Hillview Estate Maudsland: Gaven MP Meaghan Scanlon promises to raise sunset clauses issue with AG
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