Quick answer: A sunset clause is a provision in an off-the-plan contract that sets a deadline for a specific event, usually registration of the title or settlement. If that event doesn’t happen by the sunset date, the contract may allow one party to terminate. In Queensland and NSW, legislation now limits when a seller can use a sunset clause to walk away from a deal, largely in response to developers cancelling contracts to resell at a higher price.

What Is a Sunset Clause?

A sunset clause is a condition built into an off-the-plan contract that sets a date by which something must happen, commonly:

• Registration of the plan of subdivision or title
• Settlement of the sale
• Another milestone set out in the contract or relevant legislation

If that milestone isn’t met by the sunset date, the contract may give one of the parties the right to terminate or rescind, subject to the contract’s wording and any applicable state law.

How Do Sunset Clauses Work?

On paper, a sunset clause looks like a simple safety net for both parties: if the development stalls indefinitely, nobody is locked in forever. In practice, sunset clauses became a flashpoint because some developers used them to cancel contracts once property prices rose, then resold the same lots at a higher price. Queensland and NSW have both legislated to close that loophole.

Queensland: The Land Sales Act 1984 Amendments

On 22 November 2023, the Queensland Government amended the Land Sales Act 1984 (Qld) to stop sellers using sunset clauses to terminate off-the-plan land contracts unfairly.

Under the amendments, a seller can only terminate an off-the-plan land contract using a sunset clause if:

• 1. The buyer gives written consent, and the seller has complied with the required notification steps; or
• 2. A Supreme Court order permits the seller to terminate; or
• 3. A prescribed regulatory exceptionapplies (if any exist).

Important limits on the Queensland reforms:

• They apply only to contracts signed on or after 22 November 2023, or signed earlier but not yet settled by that date.
• They do not apply to off-the-plan properties under a community title scheme, such as apartments or townhouses. For those, a seller can still terminate under a sunset clause if the contract allows it, subject to the contract’s wording, applicable legislation, common law principles, and the circumstances involved.

New South Wales: The Conveyancing Act 1919 Amendments

NSW has taken a broadly similar approach, introducing mandatory disclosure statements, notice obligations, and rescission rights for purchasers through amendments to the Conveyancing Act 1919 (NSW) (Part 4, Division 10) and the Conveyancing (Sale of Land) Regulation 2022 (NSW).

As in Queensland, an NSW vendor who wants to terminate under a sunset clause generally needs to either:

• Issue proper notice of rescission and obtain the purchaser’s written consent, or
• Obtain a Supreme Court order permitting termination./li>

Key difference from Queensland: Section 66ZS(7) of the Conveyancing Act 1919 (NSW) sets out an explicit list of factors a court must weigh when deciding whether to make a termination order. Queensland’s legislation currently has no equivalent statutory checklist, which leaves more room for judicial interpretation on a case-by-case basis.

What Recent Court Decisions Have Taught Us

Queensland courts have recently tested how far developers can stretch a sunset clause, and a clear pattern has emerged:

• A developer can’t benefit from its own delay. If a developer sits on a notice obligation and then relies on the resulting delay to justify termination, courts are unlikely to accept it. Buyers who lose out this way may be entitled to damages reflecting the property’s current market value, not just the original contract price.
• Clear, mandatory wording gets enforced as written. Where a contract says a developer “must” settle by the sunset date, courts will read that as a firm obligation. Arguments based on external pressures, rising costs, or general contractual flexibility won’t override plain wording the developer agreed to.
• The courts are scrutinising developer conduct, not just the clause itself. Termination isn’t assessed in isolation. How the developer behaved in the lead-up, including notices given (or withheld), matters just as much as the clause’s technical wording.

Bottom line: sunset clauses are being read narrowly, and in the developer’s favour only where the contract’s own terms genuinely support it.

Please note this information is relevant as of the date 4 September 2026 and has not considered possible legislation changes after this date. For the most relevant information, please contact our team.

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