QLD real estate: shock of the couple as the developer activates the sunset clause
A Queensland couple said they had been waiting for their brand new home for months. Then they were left “shocked” when the contract ended.
A Queensland mother found herself ‘crying every day’ after the developer building her family’s dream home invoked a termination clause in the contract just a year after it was signed.
Peggy and David Sitbon had signed a contract in February last year to buy a four-bedroom townhouse in an off-plan development in the Queensland suburb of Seven Hills.
They claim they were told the house would be ready for the family of four in August, but the Sitbons said they waited months for the land to be put in their name and it never happened. product.
Now the couple are unsure how they will buy a new place after being overpriced when the developer, Property Developments No. 1, activated the sunset clause to legally terminate the contract in February 2022.
Ms Sitbon said they originally agreed to buy the townhouse for $700,000 but said the townhouses are now being sold for hundreds of thousands more.
The couple, from France and who became Australian citizens last year, said they had asked for the sunset date to be reduced from two years to one, as they believed the place would be finished in August and not didn’t think it would be a problem.
“It was the worst decision we’ve ever made – it was a very bitter ordeal. It was a wake-up call for us that just because you’re in a beautiful place with beautiful people doesn’t mean you should trust everyone,” Mr Sitbon told news.com.au.
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Although their $34,000 deposit has been refunded, a townhouse in the development is now advertised on realestate.com.au for offers in excess of $1 million, despite having a balcony that the Sitbons n have not chosen in their plan.
But the couple said they could no longer afford places in the area at all.
“Now with the market as it is, even with the budget we had a year ago, we can’t find anything else and now we don’t know what we’re going to do,” Ms Sitbon said.
The mum, who has two children aged 14 and 11, was frustrated and incredibly upset by the process.
“They kept us on our toes every month, they said it would be ready the next month, then the next month we had to extend our funding and whatever they asked us to do – we couldn’t control a thing. “said the 49-year-old. old said.
At the couple’s request, attorneys for Property Developments No. 1 provided the reasons for the delay in completing the building after the sunset clause was activated.
They highlighted the effect of the Covid-19 pandemic on the property market resulting in a lack of contractors and business materials, inclement weather and council delays for the heist.
But Mr Sitbon, 48, said the delays also meant they missed out on the $15,000 HomeBuilder government grant.
He added that they had asked for the sunset clause to be extended for two months from February this year and were “shocked” when it was refused.
He understood that the building had been completed on February 15 before the sunset clause took effect or was likely to take effect four weeks later.
Ms Sitbon, a French guardian, said they had dreamed of the future at home.
“We had imagined our future in this house,” she said.
“Every time we talked about the townhouse, I cried, I didn’t sleep and I woke up at night.”
Isabella Tester of David K Lawyers, who acts for Property Developments No. 1, said the possibility of property registration not occurring on the expiration date is an inherent risk associated with off-plan contracts.
“In this case, buyers specifically requested a reduced expiration date during contract negotiation. The sunset clause also allowed buyers to terminate the contract if registration had not occurred by the due date. At the time the contract was signed, our client was prepared to assume that risk,” Ms Tester said.
“It was the prerogative of the buyers to bear the risk associated with advancing the expiration date. Similarly, our client was fully entitled to refuse a change to the contract after the fact.
She added that settlement cannot take place without the registration of title, which means that transferring ownership to the buyer’s name prior to registration was never legally possible.
“Our client has always acted in accordance with his rights under the terms of the contract,” she noted.
The family aren’t the only ones caught off guard by the sunset clause issue with another angry and distressed Queensland family after the developer terminated the contract for their dream home nine months only after signing.
Sunset clauses are legal in Queensland and have been used on other developments in Brisbane and the Gold Coast.
Other states in Australia have moved to put more protections in place for buyers buying off-plan.
In New South Wales and Victoria, special laws have been established requiring sellers to obtain the consent of the buyer or the Supreme Court before using the sunset clause to terminate an off-plan contract.
Mr Sitbon said the couple are now ‘lost’ on what to do and may have to buy two-bedroom accommodation as an investment and continue to rent in the area while the children are settled in at school.
They have already had to move and struggled to find accommodation, caught in Queensland’s rental crisis where they were competing with more than 20 people during inspections, and offers of an extra $20 a week on rent were being made to secure property.
But the business development manager wants to warn other Queenslanders in the hope they won’t be caught off guard like they were.
“We have been caught in a very sophisticated trap. I can see NSW and Victoria putting specific laws in place to make sure this doesn’t happen to buyers again and if developers are having trouble being on time or there are delays they have to go to righteousness,” he said.
“We know our case is over and everything we do now is not for us because we know it’s over. It’s fair to future buyers – we think it’s very unfair to buyers but ultimately we have no more control, it’s all done.
Real Estate Institute of Queensland (REIQ) chief executive Antonia Mercorella has previously said the organization is aware of some allegations that sellers are exercising sunset clauses by terminating plan contracts to get higher prices. high for the lots they sell in a development.
“If evidence were to emerge that this is indeed the case, this could justify the introduction of stronger protections for buyers,” she said.
She added that there are currently no standard REIQ contracts for off-plan sales, and such contracts are typically drafted by the seller’s attorneys.
The CEO strongly recommends buyers seek independent legal advice.
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