Burrell Avenue Development Eumundi: Legal action over use of sunset clauses

A group of first home buyers has taken taken legal action after they had contracts to purchase land terminated. FULL DETAILS

A GROUP of buyers are taking legal action after they had contracts to purchase land torn up.

Claims have been lodged by lawyers acting for four purchasers of lots at Burrell Estate, Eumundi near the Sunshine Coast against Burrell Avenue Development Pty Ltd.

The plaintiffs say their contracts to buy land at the development, signed in 2016 and 2017, were torn up in September last year after the developer invoked a so-called “sunset clause” weeks before registration.

They had agreed to pay prices between $230,000 and $245,000 for the land, which is now valued at more than $500,000.

Lawyers acting on behalf of Burrell Avenue Development Pty Ltd have filed notice of their intention to defend the claims.

The lots at Burrell Estate in Eumundi.

News of the court proceedings comes after the Bulletin in December revealed that buyers at a separate development, Hillview Estate at Maudsland on the Gold Coast, had contracts terminated after Brisbane-based developer Metacap Developments invoked sunset clauses.

The same issue is also believed to have arisen at an estate in The Gap, Brisbane.

The use of such clauses to terminate contracts is not prohibited under Queensland law.

Controversy over their use has led to calls for Attorney-General Shannon Fentiman to intervene and have Queensland legislation amended to restrict the practice, in line with changes made to the NSW Conveyancing Act in 2015.

More than 7000 people have signed a petition at change.org calling on Ms Fentiman to act, while a similar petition to the Queensland parliament has more than 600 signatures.

Ms Fentiman last month told the Bulletin the government was “monitoring the issue and responses recently adopted by other jurisdictions.”

Attorney-General Shannon Fentiman. Picture: NCA NewsWire / Dan Peled

A source told the Bulletin that the majority of people who had originally signed up to buy land at the 25-lot Burrell Estate had become tired of waiting and voluntarily abandoned their contracts, but the few that “hung in” had ended up at a severe financial disadvantage.

“It’s just an absolute travesty,” the source said.

“... The people who hung in, who were prepared to wait, weeks before the land was actually going to be registered they came up with these rescission notices and sent them out to the lawyers saying that we are going to rescind contracts.

“The reality is that those poor people have been left absolutely high and dry. They’ve missed the market.

“They’re young people. A lot of them are first home owners going for the first home owners grant. They’ve lost their position in the market totally, they’ve paid rent, they’ve lived with their mothers and fathers. They’ve been very very seriously financially disadvantaged.”

The land at Burrell Estate, Eumundi.

The Burrell Avenue development was financed with the help of funds raised by a company called Guardian Securities, which describes itself as a “boutique investment and property services company”.

Documents seen by the Bulletin reveal $1.2 million was raised from investors for the development.

Guardian Securities was based at Ron Penhaligon Way on Robina in the Gold Coast – the same address as listed for Burrell Avenue Development Pty Ltd on contracts.

The seller’s agent listed in contracts was SMSF Property Capital Pty Ltd.

SMSF Property Capital was acquired by investment firm Venturecrowd in May 2019.

Venturecrowd’s Brisbane office is on Florence St in Tenerife. The same address is now also used by Guardian Securities.

The Bulletin reached out to Venturecrowd and Guardian Securities for comment but had not received a response at time of publication.

Follow @keithjwoods