Sunset Clauses in Off-the-Plan Contracts: What Victorian Buyers Need to Know

Buying off the plan can be a great way to secure a new home or investment at today’s price. But because the property does not yet exist, every off-the-plan contract includes a sunset clause – a deadline for the project to reach a key milestone. Understanding how the sunset clause works is essential to protecting your deposit and your plans.

What Is a Sunset Clause?

A sunset clause sets a date by which something must happen – usually the registration of the plan of subdivision, so separate titles can be issued for each apartment, townhouse or lot. If that milestone is not reached by the sunset date, the contract may be ended, and the buyer’s deposit is generally refunded.

Sunset clauses exist because developers cannot guarantee exactly how long construction, council approvals or titles will take. The clause gives both parties certainty about the longest the contract can run.

How Sunset Clauses Work in Victoria

Victoria strengthened protections for off-the-plan buyers after some developers used sunset clauses to end contracts and resell properties at higher prices. Under the Sale of Land Act 1962, a seller of residential off-the-plan property generally cannot rescind the contract under a sunset clause unless:

• the buyer gives written consent; or
• the Supreme Court of Victoria makes an order allowing it.

The seller must give the buyer notice explaining why they want to rescind. When deciding whether to allow rescission, the court considers factors such as whether the seller acted unreasonably and whether the property has increased in value. The buyer’s right to end the contract after the sunset date is not affected. Consumer Affairs Victoria has more information.

5 Essential Sunset Clause Facts

1. Check the actual sunset date

Some contracts set the sunset date years after signing. A long date gives the developer flexibility but leaves your deposit tied up. Ask whether the date is realistic for the project.

2. Look for extension rights

Some contracts let the developer extend the sunset date for delays outside their control. Check how long extensions can run and whether you must be notified.

3. Understand what triggers the clause

It may relate to registration of the plan, completion of the building, or both. Make sure you know which milestone matters.

4. Know your options if the date passes

If the milestone is not met by the sunset date, you may be able to end the contract and recover your deposit – or you may choose to wait if the project is close to completion and values have risen.

5. Plan your finance around the timeline

Pre-approvals usually expire after a few months, so you will need fresh approval as settlement approaches. Talk to your broker about how a delay could affect your borrowing.

Other Off-the-Plan Clauses to Review

Sunset Clauses and Stamp Duty

Stamp duty on an off-the-plan purchase is usually paid at settlement, which may be long after you sign. Victoria’s off-the-plan concession may reduce duty in some circumstances, but eligibility rules change, so check with the State Revenue Office and read our guide to stamp duty in Victoria.

How a Conveyancer Helps With Sunset Clauses

Before you sign, your conveyancer reviews the sunset clause, extension rights, variation clauses and deposit terms, and explains your options in plain English. During construction, we keep track of the sunset date and advise you if the developer seeks consent to rescind. As settlement approaches, we check the registered plan against your contract and prepare everything for a smooth PEXA settlement.

Learn more about our off-the-plan conveyancing services, or see local guides for growth areas like Mickleham and Wollert.

Sunset Clause Example

Imagine you sign a contract in March 2026 to buy an off-the-plan townhouse. The contract’s sunset clause requires the plan of subdivision to be registered within 30 months. If construction and registration are completed in 24 months, the developer issues a settlement notice and you settle. If registration has not happened after 30 months, the sunset clause is triggered. Depending on the contract, you may be able to end it and recover your deposit – while the developer generally cannot rescind without your consent or a court order.

Questions to Ask Before Signing

• How long is the sunset period, and is it realistic for this project?
• Can the sunset date be extended, and for what reasons?
• Has construction started, and does the developer have finance?
• Is the deposit held in trust, and can a deposit bond be used?
• What happens to my deposit if the contract is ended?

Answers to these questions help you decide whether the sunset clause gives you enough protection. Our pre-purchase contract review covers every clause, and our guide to house and land packages explains land contracts with sunset dates.

Frequently Asked Questions