Queensland family say they missed out on dream home after developer sought an extra $200k

A Queensland family says they have been hit with a bombshell revelation from their home builder and the emotional toll has been “heavy”.

A Queensland family say they have been left devastated after their developer invoked a legal termination clause in their contract, and claim they were later invited to pay a staggering $200,000 increase for their dream home.

Mum Di, who did not want her surname used, and her husband, had signed up to an off-the-plan development in April last year in the Brisbane suburb of Nundah.

She said they had agreed to pay $650,000 to build one of the three-bedroom townhouses in the project with the developer Kasalia Pty Ltd.

“Because the market was just so crazy for existing homes, we went with a fixed build option. As a young family it was a smarter move to know how much we would be spending,” Di told news.com.au.

“It was the first family home we were buying.

“We would have purchased a couple of years sooner but we lost a child late term so circumstances delayed it and we bought when it was crazy.”

The 38-year-old said the family was originally meant to be moving into the townhouse in January this year but building was delayed.

Di and her family had purchased an off-the-plan house and then the contract was legally cancelled. Picture: Supplied

Bombshell letter

Di said the project was still moving forward but the couple were shocked to receive a bombshell letter in May.

It came from the developer’s lawyers and said with “great regret” the contract would be terminated in seven days as the development had been hit by “substantial delays” and increased finance costs.

In the letter, the delays were blamed on a combination of reduced access to construction materials and labour shortages as a result of the Covid-19 global pandemic and recent weather events in southeast Queensland.

“These delays have seen the seller exceed the term of their construction loan which has

necessitated the renegotiation and extension of their finance arrangements at significant

additional cost,” the letter read.

“Unfortunately, this combined with increasing constructions costs and the ongoing outgoings incurred by the seller in connection with holding the land throughout the course of the delays has given the seller cause to reassess the feasibility of the development.”

The couple were then invited to contact the developer’s real estate agent “to discuss the possibility of negotiating a new purchase contract”.

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The development back in February this year. Picture: Supplied

‘Couple of difficult years’

The Brisbane couple had been “elated” to finally buy their own home, particularly after experiencing heartache, but that excitement all came crashing down with the letter.

“After a couple of difficult years of losing a baby and Covid and my husband and I living away from family, it was something for us to look forward to to set up our family, so the emotional toll has been very heavy,” she said.

Di said they were left “gutted” by the bombshell letter but also "pissed off” leaving the pair with a “bad taste in their mouth”.

The public servant added she and her husband were concerned that the price increase for materials and labour was made as “a blanket statement” with “no costings” attached.

“We were expected to take this at face value,” she noted.

She said the couple were so angry they never reached out to the developer’s real estate agent. But the agent called about four days after the letter was sent offering them their dream home for $200,000 more, she claimed, which they rejected.

Di wants better protections for buyers. Picture: Supplied

Stuck renting

Now, she says they have been priced out of the area where their dream home was being built and are facing their third rent increase in just two years, Di said.

“We are back at square one and it’s looking like we are in a precarious situation with the rental market with our lease ending in six months with a toddler and being back out there and having to look at where we can afford. The area we can afford a year ago we can’t afford anymore,” she said.

“I think we have missed the boat potentially and may be stuck renting until the foreseeable future when we understand what is going on with the market and can trust putting our money with a builder again as we are all fighting for existing homes.”

Di wants to see better protections for buyers in the off-the-plan process.

“It's way easier for builders to pull out and cancel versus the buyer. It’s very much leaning towards the seller and developer and the buyer has the greatest risk,” she said.

A spokesperson for Kasalia Pty Ltd told news.com.au that the company is a small-scale developer and the project was one of their first developments.

“Unfortunately our project experienced long delays due to Covid, the war in Ukraine and the recent QLD floods which caused extreme shortages of material and labour and an increase in building costs. On top of that we also experienced pressure from our financier and had to extend our loan agreement several times due to the delays,” they said.

“We never intended to go in this direction.”

They added it had been “hard and stressful” for a small family development company to do business in “this volatile market”.

Construction is booming in Queensland, including the Queen’s Wharf Brisbane precinct $3.6 billion project. Picture: Supplied QLD Government

Families hit by terminated contracts

News.com.au has revealed a number of Queenslanders who have been left shocked and upset after losing out on their dream homes when developer's have legally terminated contracts.

There was Leanne Stavrou and her partner who had signed up to two off-the-plan developments in Queensland.

They walked away from one after they were given two days to agree to a staggering $150,000 increase for their dream home, while the other was canned as the developer was “unable to obtain finance”.

Another homeowner who bought into an off-the-plan development in Brisbane, which has now been shelved, described the development company’s decision as an “absolute joke” claiming that it would leave his family financially “screwed”.

Meanwhile, other families have been hit by the sunset clause being invoked as the projects haven’t been completed on time.

One experience left a Queensland mum “crying every day” after their contract was cancelled due to their sunset clause, while one dad said they had been priced out of the area after their contract was axed.

The Queensland Government is examining the issue of termination of off the plan contracts via sunset clauses. Picture: Supplied Qld Government

Another couple saw their contract ended just nine months after signing it leaving them angry and distressed.

Sunset clauses are legal in Queensland 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.

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 and could introduce changes at the end of the year.