Sunset Clauses in Off-the-Plan Contracts. What Australian Buyers and Sellers Need to Know

A sunset clause is the date in an off-the-plan contract by which the title must be registered. If the title is not registered by the sunset date, the contract gives one or both parties the right to rescind, refunding the deposit and releasing both sides from the deal.

Sunset clauses were once a developer-friendly mechanism. Where the market had risen sharply during the contract gap, a developer could let construction run past the sunset date, rescind the original contract, refund the deposit and resell the unit at the higher current market price. That practice (known as "sunset clawback") triggered a wave of state reforms from 2015 onwards. The position now varies materially between states.

This article sets out what a sunset clause does, why it matters and how each state regulates developer rescission. It is process-only. Buyers and developers acting on a specific contract should obtain legal advice on their state's current position.

What a Sunset Clause Does

The sunset clause sits in the off-the-plan contract. It states the date by which:

• The plan of subdivision or strata plan must be registered, and
• The title to the lot or unit must be created.

If those two conditions are not met by the sunset date, the rescission rights in the clause are triggered. Standard drafting gives both parties the right to rescind, with the deposit refunded and no further liability between the parties.

The sunset date is set at exchange. For an apartment project, sunset dates of 24 to 48 months from exchange are common, depending on the complexity of the build. For a land subdivision, sunset dates of 12 to 24 months are common.

Why Sunset Clauses Became Controversial

In rising markets between 2010 and 2015, a pattern emerged. A developer would sign off-the-plan contracts at $X. By the time the building was nearing completion, the market had moved to $X plus 30 per cent. Rather than complete on the original contracts, some developers allowed construction to run past the sunset date, exercised the rescission right, refunded the deposit and resold the units at the higher current price. The original buyers lost the upside they had contracted to capture.

This led to state-level reforms beginning with NSW in 2015 and rolling through the major states over the following years. The reforms restrict the developer's ability to rescind under a sunset clause without either buyer consent or a court order. The buyer's right to rescind is generally preserved without change.

State-by-State Position on Developer Rescission

The table below summarises the position for residential off-the-plan contracts. The detail in each state is more nuanced than a single row captures, and the legislation has been amended multiple times. Always confirm the current position with a property solicitor in the relevant state.

State	Key statute	Developer rescission requires	Buyer rescission
NSW	Conveyancing Act 1919, ss 66ZL-66ZS (2015 reforms, amended)	Buyer's written consent or NSW Supreme Court order. Court considers reasonableness, developer conduct and market movement.	Preserved. Buyer may rescind once sunset date passes.
VIC	Sale of Land Act 1962, s 10A (2019 reforms)	Buyer's written consent or VCAT/Supreme Court order. Court considers similar factors to NSW.	Preserved.
QLD	Land Sales Act 1984; Property Law Act 2023	Buyer's written consent or Supreme Court order in certain circumstances. Reform regime applies to contracts entered after the relevant commencement.	Preserved.
WA	General contract law, no statutory sunset reform as of 2026	Contract terms govern. Standard REIWA contracts allow developer rescission on sunset. Some carve-outs exist for unfair contract conduct.	Preserved by contract.
SA	General contract law, limited statutory intervention	Contract terms govern. Common law principles of frustration and unconscionability apply.	Preserved by contract.
TAS	General contract law, no statutory sunset reform	Contract terms govern.	Preserved by contract.
ACT	General contract law, no specific sunset reform	Contract terms govern.	Preserved by contract.
NT	General contract law, no specific sunset reform	Contract terms govern.	Preserved by contract.

The pattern is clear. NSW, VIC and QLD have legislated to require either buyer consent or a court order before a developer can rescind under a sunset clause. The other states still rely on the contract terms, with general common-law and consumer law protections sitting behind them.

This is a moving target. Several states have flagged further reform. Always check the current position for the relevant state at the time of contract.

What the NSW Court Considers

NSW has the most-tested statutory framework. When a developer applies to the Supreme Court for permission to rescind under a sunset clause, the court typically considers:

• The reasons for the delay in registration.
• Whether the developer acted reasonably and in good faith.
• The increase in market value of the property since exchange.
• The effect of rescission on the buyer.
• Whether the buyer would suffer hardship from rescission.
• Any other factor the court considers relevant.

In practice, developers who can show genuine construction delays beyond their control (council delays, force majeure events, contractor insolvency) have a stronger case for court-permitted rescission than developers who appear to have allowed delays to capture market upside.

What Buyers Can Do Before Signing

Three protections sit on the buyer's side of the contract.

The first is the sunset date itself. A sunset date that is closer to the realistic completion date gives the buyer more leverage if the project runs late. A very long sunset date dilutes the protection.

The second is rescission triggers beyond the sunset. Some buyer-friendly contracts include progress milestones (foundation pour, structure complete, practical completion) that give the buyer rescission rights if the developer fails to meet them. These are negotiated at the contract review stage.

The third is the deposit form. A deposit held in a trust account or as a bank guarantee is materially safer than a deposit released to the developer. Where the contract is rescinded by either side, the deposit is returned without further dispute.

What Developers Should Know

For developers running off-the-plan stock, three points matter under the reformed regimes.

Developer-initiated rescission is no longer a unilateral decision in NSW, VIC and QLD. Either the buyer consents or the court approves. Court approval is expensive, takes time and is not granted lightly.

Construction delays should be documented contemporaneously. Where a delay is genuinely beyond the developer's control, the documentation supports any later application for court-permitted rescission.

Buyer communication during the contract gap matters. Developers who keep buyers informed of progress and any delays are in a stronger position both commercially and legally if the project runs late.

FAQ

Can a buyer rescind under a sunset clause if the developer is willing to complete?

In most contracts, both parties have a right to rescind once the sunset date has passed. If the developer is still willing to complete (and is moving toward registration of the title), the buyer's rescission right is typically still available, though specific contract drafting varies.

What happens to the deposit if a sunset rescission is exercised?

Standard sunset clauses return the deposit to the buyer with interest accrued in the trust account. No further compensation is paid to either party.

Does the sunset clause apply to land subdivisions as well as apartments?

Yes. Any off-the-plan contract that is conditional on the future registration of a plan and title typically carries a sunset clause. Land subdivision sunsets are usually shorter than apartment sunsets because the development timeline is shorter.

Do the state reforms apply retrospectively to existing contracts?

The NSW, VIC and QLD reforms generally apply to contracts entered after the commencement date of the relevant legislation. Contracts signed before the commencement date are governed by the prior law, which may give developers broader rescission rights.

Do sunset clauses apply to commercial off-the-plan purchases?

Sunset clauses are common in commercial off-the-plan contracts but the statutory reforms in NSW, VIC and QLD focus on residential contracts. Commercial buyers should not assume the same protections apply.

Related Resources

• Buying Off the Plan in Australia. The Complete Process for 2026

About AgentBridge

AgentBridge is a property distribution business connecting developers and sellers with a national network of 80+ buyers agents across every Australian state. Off-the-plan developers using the distribution model retain control of contract terms, including sunset dates and the variation clause. AgentBridge does not provide legal advice on contract drafting. Buyers and sellers should obtain independent legal advice on the position in the relevant state.

To request a confidential project assessment, speak to AgentBridge about your project.

Last reviewed: 22 May 2026.