Buying Off-The-Plan? Here’s Everything You Need To Know About Sunset Clauses

By Shane | Uncategorized

Apr 25

Are you looking to purchase an off-the-plan home? Here’s everything you need to know about Sunset Clauses. Off-the-plan property buyers are often concerned when they see the Sunset Clause included in the Contract of Sale. Usually, Sunset Clauses are included as a means of protecting the interests of both parties when it comes to a sale. Understanding Sunset Clauses

A statement in the Contract of Sale is referred to as the Sunset Clause. It indicates the maximum time in which the developer has to finish the project. The time indicated may vary across developments, depending on the size of the property. You are legally entitled to walk away from your contract and receive your deposit back in full if your property has not been completed by sunset date. There are certain conditions, depending on the state, that must be included in the contract regarding the Sunset Clause.


Time Limit

The maximum time it will take to complete the project is the Sunset Clause. As determined in the Contract of Sale, it will generally be completed by sunset date. If not, the contract may be cancelled. Given that case, there should be a deposit refund and the buyers are free to look elsewhere for their next dream home. Otherwise, both the buyer and the vendor can enter into a new contract if they’re still satisfied with the original pricing and terms.

On the other hand, there is an exaggerated time frame that allows any delays the developer may experience such as industrial action, severe weather conditions, or development funding delays. Before signing on, it’s worth to ask the developer or their representative if all permits for the development have been obtained. It may cause an extended delay if the development gets held up in the planning process.



One of the risks involved is if a developer purposely delays a project in an attempt to get a higher price from a different buyer. Even though you’ll get your deposit back, the market may have moved on in the meantime and property values may have risen above your means. There are also some cases in which the developer may delay the project so the initial contract may be cancelled and enter into a new Contract of Sale with a new buyer at a higher price.

Ensure that you carefully read the Contract of Sale before signing it. Always get a lawyer to review your documents too. It may also be possible that you can pad the date out in negotiation with the developer. It’s important to understand how far along the building and development is already and what construction is needed for completion.



As with all things concerning your new property purchase, you need to do your research. Make sure that the developer has a good track record and a credible presence in the industry.  See how the developer’s other projects have gone to be able to consider whether it’s a reputed developer who has successfully completed similar developments in the past.

It’s also important that buyers believe in what they’re buying and in the security of a contract. Developer defaulting on the Sunset Clause is a rare occurrence. Whether you have any concerns regarding the Sunset Clause or not, it’s always best not to get independent legal advice on the Contract of Sale.

You can share your story in the comments section below if you had any experience with a Sunset Clause.





Author: Shane

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