QLD family ‘suffer’ after developer rips dream home away

The family of four watched as tradies finished building their home and were excited to move in. But were left “angry” when the contract was ended.

A Queensland family claim they have been left to “suffer” after a developer building their dream home invoked a termination clause in the contract.

Benjamin* had signed a contract in February last year to buy a townhouse in an off-the-plan development in the Brisbane suburb of Parkinson.

He was told the house would be ready for his family-of-four by June last year, but is furious his family will never be able to live in their dream home.

Now the family don’t know if they will ever be able to afford a new home after being priced out of the area when the developer, Highway Developments No. 1, activated the sunset clause to legally terminate the contract in January this year.

Benjamin said they had originally purchased the townhouse for $466,900 but claimed homes in the development are now being sold for hundreds of thousands more.

The 42-year-old had requested the sunset date be reduced from five years to less than one because they believed the place would be finished by June as work had already begun on the site.

“I personally believe that the house was 95 per cent ready in August when they confirmed in writing that it was ready for bank valuation and bank guy came and saw it,” he claimed.

“Then … I don’t know what happened.”

The Parkinson development site back in December 2020. Picture: Google Maps

Months of delays

For the next five months the completion date kept getting pushed back until Benjamin was told his new home would be ready by January 2022

“There were fixtures in the bathroom, the airconditioning was installed, electricals had been applied in July 2021,” he told news.com.au.

“They were an experienced developer building in the same area with many projects.”

Benjamin claims the contractor’s major equipment was removed from the development site just before Christmas.

Yet, he was getting worried as the sunset date clause loomed on 31 December 2021 and a request to extend it was refused, despite being told completion was just a month away.

Then a bombshell letter dropped in his inbox just five days into the new year telling him the contract had been terminated based on the sunset clause.

“I tried to contact them even to see if they were willing to negotiate but they refused to talk to me,” he said.

“The developers said it’s a legal matter so talk to our lawyer and I said ‘OK if it’s not intentional and its something out of you control and something happened like a natural disaster, at least give us details of what happened’.”

“We are angry and frustrated because if we try and call the developers they don’t want to talk, they don’t want to listen to you.”

Do you know more or have a similar story? We want to hear from you [e-mail]

Work had began on the site prior to Benjamin signing the contract last year. Picture: Google Maps

Structural and facade works were almost complete in June, Benjamin claimed. Picture: Supplied

‘Challenging constraints’ across the building industry

However, the developer Highway Developments No 1 has denied the home was complete and said the project was “subject to significant delays associated with material supply and trade shortages as well as prolonged regulatory processes”, according to a statement from their law firm David K Lawyers provided to news.com.au.

It added that these factors are all “challenging constraints which have been experienced by developers across the building industry”.

“As a result, any anticipated time frames provided by our client were purely estimates, as it would not have been possible to provide a definite registration date,” the statement said.

“Our client endeavoured to provide as accurate a time frame as possible, however ultimately registration of this development did not occur until March 2022, months after this contract came to an end.”

The law firm added that the developer had “liaised directly with the buyer to the furthest extent possible regarding their queries” but it became appropriate to direct them to their legal representative “given that the buyer queried points of law and contractual matters”.

Electrical fittings were near completion by July, Benjamin claimed. Picture: Supplied

Bathroom fittings near completion, he also claimed. Picture: Supplied

Skyrocketing prices

The dad-of-two, whose children are aged eight and 11, says as a result of the developer terminating the contract using the sunset clause they can take advantage of property prices skyrocketing in Brisbane meaning they could get a lot more money for the townhouse.

“Prices went up 20 to 25 per cent,” he added.

“You can imagine the difference if they sold the property for $650,000 or $700,000. By cancelling my contract, they earn more than $270,000 just from my unit.”

Benjamin said he had already been priced out of owning a home and the townhouse was a good compromise, but now he doesn’t know if the family will ever be able to afford their own place.

“We were thinking what are we going to do? The prices had gone up so much, we can’t buy the same thing in the same area for the same price and we don’t have any extra budget. Initially it was very depressing and we were thinking we were getting no HomeBuilder grant, having to pay stamp duty and because prices have been increased, we would not be able to have a 20 per cent deposit and will have pay lender’s mortgage insurance,“ he said.

“We were becoming more and more depressed, there were some nights I couldn't even sleep frankly as I was thinking about what to do.

“We are the losers in all of this.”

The Parkinson development site back in December 2020. Picture: Google Maps

‘Decision to accept this risk’

Lawyers for Highway Developments No 1 blamed the impact of Covid for creating a shortage of tradies and a lack of required materials, including cladding and internal fixings as the reasons for the delay, in a letter to Benjamin's law firm.

They also blamed different authorities, including the “energy provider on-site experienced significant delays for the required upgrades and connection to the power network”, and weather-related delays at critical points during construction.

In a statement to news.com.au, David K Lawyers added that “construction of the individual townhouses or the removal of heavy machinery from the site would not have been accurate indicators of how close the development was to registration”.

“The physical construction of the townhouses is only one step in this process, as council and other legislative requirements must be complied with before registration of titles is possible,” it said.

The possibility that property may not be registered by the sunset date is an inherent risk associated with off-the-plan contracts, the developer’s lawyers said.

“In this instance, the buyer specifically requested a reduced sunset date when the contract was negotiated. The sunset clause also allowed the buyer to terminate the contract if registration did not occur by the sunset date,” the statement explained.

“At the time of contract signing, our client was willing to bear this risk. In this case, the result of the buyer’s decision was that the sunset date fell significantly short of what proved to be a delayed registration date.

“It was the buyer’s decision to accept this risk. Likewise, our client was well within their rights to refuse an amendment to the contract after the fact.”

The contractors had fully left before the sunset date, claimed Benjamin. Picture: Supplied

Queensland’s sunset clause issue

The family are not the only one that have been subject to the sunset clause issue with two other Queensland families left angry and distressed after the developer ended the contract for their dream home.

One left a Queensland mum “crying every day” after their contract was cancelled due to their sunset clause.

In Queensland, sunset clauses are legal and have been used on other developments in Brisbane and the Gold Coast.

Other states around Australia have moved to put more protections in place for buyers who are purchasing off the plan.

In New South Wales and Victoria, 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.

Attorney-General Shannon Fentiman said she intends to address the issue by the end of the year. Picture: Nigel Hallett

‘The damage is done’

Benjamin is critical of the Queensland government for failing to act on the issue as it puts buyers like him in an “unfair” position, he said, even though the practise is legal.

“In NSW or Victoria they have already made the laws and amendments so developers can’t cancel the contract unless they have written permission from buyers or an order from Supreme Court that delays are out of their control and that’s the logical thing to do,” he said.

“It’s too little too late from the Queensland government, the is damage already done and so many people have already suffered.”

A spokesperson from the Office of Fair Trading said the Queensland Government is examining the issue of termination of off the plan contracts via sunset clauses, as part of the Property Law Review, which is currently underway.

“This review will give careful consideration to approaches adopted by other jurisdictions that have grappled with issues associated with sunset clauses being included in off the plan sales contracts,” they said.

“It is important the Queensland Government carefully consults with all relevant stakeholders, to ensure any legislative solution that is developed appropriately addresses the issue without inadvertently causing unintended consequences.

“Subject to this consultation and consideration, the Attorney-General has advised she intends to introduce legislative amendments to address the issue by the end of the year.”

*Name has been changed