SUNSET DATES – QUEENSLAND, NEW SOUTH WALES & VICTORIA
When purchasing ‘off the plan’ (i.e. where titles have not yet registered for the property), there may be statutory and/or contractual timeframes that exist allowing one or more parties to terminate if settlement has not occurred by a set date, known as the ‘sunset date’.
Across Queensland, New South Wales & Victoria the legal position on ‘sunset dates’ are different – We have set out a full breakdown for each State below.
QUEENSLAND
STATUTORY SUNSET DATE
LAND
A buyer may terminate an off the plan contract if settlement has not occurred within 18 months from the contract date (section 14 of the Land Sales Act 1984).
STRATA (UNIT/TOWNHOUSE)
A buyer may terminate an off the plan contract if settlement has not occurred within 5.5 years from the contract date (or 3.5 years from the contract date if the contract does not include a sunset date) (section 217B of the Body Corporate and Community Management Act 1997).
CONTRACTUAL SUNSET DATE
In addition to the statutory timeframe, the contract may also include a sunset clause nominating a sunset date.
This clause will generally allow both the buyer and seller to terminate the contract if settlement has not occurred by the sunset date. It may also allow either party to terminate if registration has not occurred by the sunset date.
The sunset date nominated in the contract can be shorter than, but cannot exceed, the statutory timeframe.
You should review your contract or discuss with your solicitor to determine if different timeframes are applicable as a result of your specific contract clauses.
NOTE: From 22 November 2023, if settlement of an off the plan land contract has not occurred by the contractual sunset date, a seller can only terminate using the sunset clause:
- With the written consent of the buyer (the seller will need to provide the buyer with a ‘sunset clause notice’ at least 28 days prior to the sunset date and the buyer must respond by the day before the sunset date, otherwise the buyer will be deemed to have consented to the termination); or
- Pursuant to a Supreme Court order (the seller would need to prove that it is just and equitable for the contract to be terminated in the circumstances).
These amendments also apply to contracts entered into before 22 November 2023, but not yet settled by this date.
These amendments do not apply to strata contracts – sellers can still terminate without the consent of the buyer or a court order.
NEW SOUTH WALES
STATUTORY SUNSET DATE
There is no legislatively prescribed sunset date. Parties must instead rely on contractual sunset clauses.
CONTRACTUAL SUNSET DATE
Under a contractual sunset clause, the sunset date is the latest date by which the sunset event must occur (this includes the creation of the lot and the issue of the occupation certificate in relation to the lot).
A vendor can only rescind the contract under the sunset clause if:
- The vendor obtains the purchaser’s written consent at least 28 days before the proposed rescission; or
- The vendor obtains an order from the Supreme Court (the vendor would need to satisfy the Court that making the order is just and equitable in all circumstances).
There is no restriction on a purchaser rescinding a contract under the sunset clause.
(Section 66ZS Conveyancing Act 1919).
VICTORIA
STATUTORY SUNSET DATE
A purchaser may terminate an off the plan contract if the plan of subdivision has not been registered within 18 months from the contract date (section 9AE(2) Sale of Land Act 1962).
CONTRACTUAL SUNSET DATE
In addition to the statutory timeframe, the contract may also include a sunset clause nominating a sunset date. In this case, the contractual sunset date will apply instead.
A vendor can only rescind the contract under the sunset clause if:
- The vendor obtains the purchaser’s written consent at least 28 days before the proposed rescission; or
- The vendor obtains an order from the Supreme Court (the vendor would need to satisfy the Court that making the order is just and equitable in all circumstances).
There is no restriction on a purchaser rescinding a contract under the sunset clause.
(Section 10B(3) and 10E Sale of Land Act 1962).
