Brisbane family devastated as developer reneges on $645,000 dream

A Brisbane family has been left fuming after their developer invoked a sunset clause that has seen their plans for a dream home go up in smoke.

Sanjay Katyara has started a petition calling for sunset clauses to be abolished. Picture: Nigel Hallett

• Revealed: Next housing developments

Aspiring homeowners are calling for a major change to Queensland’s property laws to protect them from developers pulling the rug out from under them and reneging on the deal at the 11th hour.

Property experts say the use of controversial sunset clauses are increasing as Queensland’s property market boom shows no sign of slowing down – despite the median sale price in Brisbane already climbing from $538,000 to $800,000 in just five years.

The Queensland Government introduced new laws earlier this month to protect buyers from losing their land via a sunset clause, but unlike New South Wales, Victoria and the ACT it does not apply to off-the-plan land and build packages.

Sanjay Katyara, 40, is leading calls for the laws to be extended to build packages in line with other states, having been among 133 families stung by a sunset clause at a site in Rochedale where he signed a contract to buy for $645,000.

Developer Bespoke Rochedale Pty Ltd invoked the sunset clause, because the “sunset date” requiring them to have levelled the land and built retaining walls to turn it into a “ready to build” piece of land, as stipulated in the contract, had passed.

They have now returned customers’ deposits and if they choose to, they can then sell the lots on at a higher price and this is a perfectly legal practice.

“Legally they can do it. (But) it’s not ethical to do it,” Mr Katyara said.

The developer said “due to the extent of the uncertainties, we are not in a position to renew contracts” and added that they were working with council and other stakeholders to try to resolve the situation.

Attorney-General Yvette D’Ath said the state government had noticed an increase in reports of sunset clauses being used during the Covid pandemic, which coincided with the state’s property boom.

Aleksandra Drapinska was also stung by a sunset clause.

Mr Katyara has started a petition on Change.org calling for sunset clauses to be better regulated in Queensland, something that is already in place in the other eastern states.

“The sunset clause in real estate contracts was originally designed to provide a reasonable degree of flexibility for both buyers and sellers,” his petition reads.

The petition said it appeared that in certain cases the clauses had been used to cancel contracts where property values had increased.

Earlier this month the Queensland government passed new laws to limit the powers of developers invoking a sunset clause, requiring written consent from the buyers or a Supreme Court order to do so.

Unfortunately, these new laws only relate to land purchases, not contracts for a land and build parcel like the one in Rochedale.

According to Mr Katyara, whose petition is addressed to both Ms D’Ath and the Housing Minister Meaghan Ms Scanlon, those same changes can’t come soon enough for people in his situation.

Ms D’Ath said the changes were only for land contracts ”so as not to put undue financial pressure on construction companies and developers who are navigating volatile and fluctuating material costs, supply chain issues and labour shortages”.

The government plans to review this decision in one to two years to see if they should extend the provisions to off-the-plan constructions as well.

Mark Boothman, the member for Theodore, has been campaigning “hard” for some time after a “number of his constituents” were impacted “by the unethical practises” of sunset clauses.

He said the new legislation is overdue and that he would be watching closely to see if “further changes are needed”.

The Katyara family say they have been left high and dry.

They claims 133 other families on the site were also impacted.

Matthew Raven, a partner at Gadens and an expert in property law, said the “unusual market conditions” in Queensland of rising property and construction costs may have “brought on” the use of sunset clauses.

In the past two years, Brisbane’s median home value has jumped by 15 per cent even with the economic downturn.

The median house price has gone from $650,000 in 2021 to $742,500 as of June this year, according to Templeton Property.

And it’s only set to keep growing, with a report released last week finding Brisbane’s housing market is set to see double digit growth next year, as it could blow out to as much as 7 to 11 per cent, more than anywhere else in the country.

“Before two or three years ago, I don’t think I’d ever seen them (a sunset clause) used,” Mr Raven said, but now he has seen several. “That’s a bit of a spike.”

In NSW, Victoria and the ACT, special laws were established requiring sellers to get consent from the purchaser or the Supreme Court before using the sunset clause to terminate an off the plan contract.

The other states have no restrictions on sunset clauses, but instances like this are rarer as they have not experienced as much of a property boom compared to Brisbane.

Mr Raven said he saw no reason why Queensland shouldn’t embrace those protections like the other eastern states.

The Queensland arm of the Urban Development Institute of Australia said sunset clauses were used in six per cent of purchases over the last three years, according to a survey they did.

The entire eastern seaboard has changed rules around sunset clauses. The block the Katyaras wanted to buy. Picture: Nigel Hallett

Mr Katyara thought his Rochedale site would be completed by this year and even secured his son a spot in a local school for kindergarten.

However, the development has been plagued with delays, and in April, buyers received an email from Bespoke Rochedale Pty Ltd, asking to mutually terminate the deal.

Then at the end of October, the developer indicated to several buyers that they had no plans to extend the contract.

“Our client has instructed us that they do not agree to the extension of the sunset date,” the solicitors relayed to customers.

In a statement to The Courier-Mail, Bespoke Rochedale’s legal representative said “The project has an undefined delivery date due to a number of constraints” and that they were “not in a position to renew contracts”.

Although Mr Katyara’s $62,595 deposit has been returned to him, he says it doesn’t go very far given the current state of Brisbane’s property market.

Another impacted family, who wished to remain anonymous, also signed onto the Rochedale development site in 2021 and claim they have been left high and dry.

The man and his wife, both aged 34, had bought into the Rochedale development in the hopes of settling down and starting a family but have now missed out.

“Now property prices have gone up another two years,” he said.

“Technically we’ve lost two years of our lives, maybe more.”

Many have had to give up on their dreams and settle for farther away, and at a higher price. Ms Drapinska’s site.

Two Queenslanders who previously lost their dream homes due to a sunset clause say they had to give up on their plans and move further out of their preferred area, all while paying more for the less than ideal arrangement.

In April this year, Aleksandra Drapinska, 36, and her partner, missed out on a $306,000 land parcel in the Brisbane suburb of Hillcrest.

“We had our heart set to buy the land in Hillcrest,” Ms Drapinska said.

“We obviously can’t live where we wanted to live.”

They ended up spending an additional $150,000 to live further away.

Wayne Dunkley and his partner Jane had grand plans to move to the Sunshine Coast and even sold their home in Bundaberg in 2020 to secure it.

But last year, the property was ripped from the couple through a sunset clause and they couldn’t afford to buy a comparable home.

“We missed all the rise in the market,” Mr Dunkley, 63, said. “We were priced out of the Sunshine Coast which is where we wanted to be.”

They ended up buying a house in the Lockyer Valley that was so rundown he had to give up his full-time job as a Coles delivery driver to oversee its renovation.

Email Alex Turner-Cohen