Sunset clauses for apartments going nowhere amid non-committal Government, Opposition

It could be years before changes to sunset clauses for apartment buildings are even considered, with neither Government nor Opposition planning any changes soon. Meanwhile, buyers face an uncertain future

It could be years before changes to sunset clauses for apartment buildings are even considered, with the Government not even reviewing the matter for “one to two years” and the Opposition also hedging its bets.

Buyers of hundreds of apartments currently under construction on the Gold Coast, who signed contracts before an unexpected pandemic property boom, are now at risk of losing them.

A single line in their contracts with developers, which allows either party to cancel a contract if construction has not completed by an agreed date, has already cost some buyers their dream of home ownership or a comfortable retirement.

The clauses create a lucrative incentive for developers to cancel pre-sale contracts and resell apartments at far higher prices.

New Queensland laws for the sale of land were introduced in November – requiring written consent from a buyer before a contract can be terminated, or a Supreme Court order – but the amendments did not extend to apartments.

The Boutique development by Draycon at Chevron Island on the Gold Coast has stalled near completion.

Among the projects where buyers are on shaky ground is Midwater at Main Beach, where prices have swelled by 88 per cent cent since buyers signed up 2021.

A payment dispute has seen the builder leave the 119-unit project last week, with buyers worried the chances of completion before the sunset date are slim.

Buyers in the 42-unit Boutique project at Chevron Island, under way by Sydney developer-builder Draycon, say little if any work had been done on the site this year.

Prices have risen by an average 63 per cent since they signed up, with sunset clauses falling early next year.

One local, whose elderly family member had hoped to retire in Boutique, said the situation had taken a toll on the mental health of buyers.

“Their stuff is in storage, they’ve been living with family for the past two years, it’s torture for them,” she said.

“Now they’re probably going to lose their contracts and prices have gone through the roof - how will they get into the market?

“They can’t work anymore so they can’t make more money. It’s caused so much damage.”

Queensland Attorney General Yvette D'ath.

Shadow Attorney-General Tim Nicholls.

Member for Surfers Paradise John-Paul Langbroek, whose electorate includes both projects, said he’d written to the Government on behalf of a buyer in the Boutique project.

The Government advised the buyer to obtain legal advice but offered no definitive timeline of when or if the laws would be amended.

Mr Langbroek said he could “understand the frustration” of locals caught in the mess.

“It’s just anther issue that Labor has failed to deal with over the last decade,” he said.

Attorney-General and Minister for Justice Yvette D’Ath said its changes to sunset clauses were initially limited to land to avoid putting “undue financial pressure on construction companies and developers who have been navigating volatile and fluctuating material costs, supply chain issues and labour shortages since the pandemic”.

“The government is taking a staged approach to sunset clause reforms, with a review of the effectiveness of the changes in relation to land sales contracts to begin one to two years after the commencement of the new laws,” she said.

“Part of the review will be to help the Government decide if the new requirements should also apply to the sale of proposed community titles scheme lots.”

Draycon’s Boutique at Chevron Island on the Gold Coast has stalled near completion.

Shadow Attorney-General Tim Nicholls said his party would also conduct a review, but gave no specific timeline.

“Labor was dragged kicking and screaming to sunset clause reforms for off-the-plan packages after years of advocacy by the LNP,” he said.

“If elected, the LNP will conduct a review to consider if additional protections for buyers are needed.”

In the meantime, buyers remain in limbo.

“When I talk to people outside Queensland about this, they’re flabbergasted,” the buyer’s relative said.

“How is this allowed?”

Originally published as Sunset clauses for apartments going nowhere amid non-committal Government, Opposition