By Jason Given · June 2026 · 8 min read
A sunset clause is a provision in a property or construction contract that sets a final deadline - the "sunset date" - by which certain conditions must be met. In most cases, this means the construction must be completed, the plan of subdivision registered, or settlement finalised by a specific date. If those conditions are not met, either or both parties may have the right to terminate the contract.
For buyers purchasing off-the-plan apartments, house-and-land packages, or new builds in South Australia, sunset clauses are not automatically included - they typically need to be requested or negotiated into the contract. When included, they are designed to protect both parties - buyers are not locked in indefinitely if a project stalls, and builders have a defined window to deliver without being held to an unrealistic timeline.
The problem is that sunset clauses can also be used against buyers - and in South Australia, the protections are weaker than in other states.
In South Australia, sunset clauses are governed by general contract law rather than specific legislation. The key Acts that touch on property contracts - the Land and Business (Sale and Conveyancing) Act 1994 and the Building Work Contractors Act 1995 - set out requirements for disclosure, cooling-off periods, and domestic building contract terms, but neither currently contains specific sunset clause protections.
This means the sunset clause terms in your contract are largely determined by negotiation between the parties. In practice, the developer or builder typically drafts the contract and sets the terms - including the sunset date and who can invoke the clause.
Typical sunset timeframes in SA:
The biggest risk is developer exploitation. In a rising market, some developers have been known to deliberately delay construction, invoke the sunset clause, cancel the contract, and resell the property at a higher price. The buyer gets their deposit back - but nothing else. No compensation for lost opportunity, no reimbursement for legal fees or inspection costs, and no share of the capital growth that occurred while they waited.
Consumer and Business Services (CBS) has also identified situations where builders have threatened to invoke a sunset clause to pressure buyers into paying additional funds beyond the contracted price - effectively using the clause as leverage rather than as a genuine deadline.
Unlike NSW and Victoria, where developers must now obtain a court order or buyer consent before invoking a sunset clause, SA currently has no equivalent requirement. A developer can simply exercise the clause unilaterally if the contract terms allow it.
Worth noting: SA is currently the least regulated of the major Australian states when it comes to sunset clause protections. Some buyers choose to have a conveyancer or solicitor review the sunset clause terms before signing - particularly on larger off-the-plan purchases.
In NSW, amendments to the Conveyancing Act 1919 (introduced in 2015) require vendors to obtain either buyer consent or a Supreme Court order before rescinding an off-the-plan contract under a sunset clause. The court will only grant the order if it is just and equitable to do so.
In Victoria, similar protections were introduced through the Sale of Land Act 1962 (amended in 2019). Vendors must obtain buyer consent or a Supreme Court order, and the court considers whether the vendor acted reasonably in the circumstances.
In Queensland, the Body Corporate and Community Management Act was amended in 2023 to cap off-the-plan sunset periods at 5.5 years for community title schemes and require seller consent or court approval for rescission.
SA has none of these protections in place - yet. The SA Government's Building and Construction Industry Review, launched in October 2024, explicitly flagged sunset clause regulation as a priority. The first stage of reform - the Statutes Amendment (Building and Construction Industry Review - Penalties) Act 2025 - came into operation on 15 January 2026, strengthening penalties and enforcement across the building industry. Sunset clause-specific provisions are expected in subsequent legislation.
This is where sunset clauses become directly relevant to your mortgage - and it is an area most buyers do not think about until it is too late.
Pre-approval expiry: Most mortgage pre-approvals are valid for 60 to 90 days, with some lenders offering up to 6 months. If your off-the-plan contract has a sunset clause running for 18 months or longer, your initial pre-approval will expire well before settlement. You will need to reapply - and there is no guarantee the lender will approve the same loan.
Re-assessment risk: When you reapply for finance closer to settlement, the lender reassesses everything - your income, expenses, credit history, the property valuation, and current lending criteria. If your circumstances have changed, or if the lender has tightened their policies, you may not qualify for the same amount.
Valuation risk: Lenders will value the property at or near settlement. If the market has softened since you signed the contract, the valuation may come in lower than the purchase price - meaning you need a larger deposit or may not be able to proceed at all.
Interest rate risk: If rates have risen between signing and settlement, your borrowing capacity may have decreased. A loan that was comfortable at 5.5% may be unaffordable at 6.5%. The APRA serviceability buffer amplifies this effect - a 1% rate increase reduces borrowing capacity by significantly more than the raw repayment difference suggests.
Finance clause timing: The finance clause in your contract - which allows you to terminate if you cannot obtain finance - typically has a much shorter window (14 to 21 days) than the sunset clause. Once the finance clause expires, you are committed even if your finance situation changes before settlement.
Lendology's role: We work with buyers throughout the construction period - not just at the point of initial approval. When you are buying off-the-plan or building, we help you understand how the contract timeline interacts with your finance, plan for re-assessment, and position you to settle successfully when the time comes. Book a free chat to talk through your situation.
Sunset clauses are not automatic in SA construction and off-the-plan contracts - they need to be negotiated in. And when they are included, South Australian buyers have fewer legislative protections than in NSW, Victoria, or Queensland. Until the SA Government legislates specific sunset clause protections, the burden falls on buyers to protect themselves through careful contract negotiation.
From a finance perspective, the gap between signing an off-the-plan contract and settling can be long enough for your entire borrowing position to change. Working with a broker who understands construction lending and can help you plan for that gap is one of the most practical steps you can take.
If you are considering buying off-the-plan or building in Adelaide - book a free chat and we will walk you through the finance implications of your specific contract and timeline.
A sunset clause is a contractual deadline by which certain conditions must be met - typically completion of construction or registration of a plan of subdivision. If the conditions are not met by the sunset date, either or both parties may have the right to terminate the contract. The buyer's deposit is returned, but they receive no compensation for lost opportunity or price increases.
Not yet. Unlike NSW and Victoria, where developers must obtain a court order or buyer consent before invoking a sunset clause, SA currently has no equivalent legislation. Sunset clauses in SA are governed by general contract law. However, the SA Government's Building and Construction Industry Review has flagged sunset clause regulation as a priority, with reforms expected in coming legislation.
Most mortgage pre-approvals last 60 to 90 days, but sunset clauses on off-the-plan purchases can run for one to three years or longer. Your pre-approval will almost certainly expire before settlement, meaning you will need to reapply. Your income, expenses, credit history, the property valuation, and lending criteria may all have changed - there is no guarantee you will still qualify for the same loan.
In theory, yes - and it has happened in practice. In a rising market, some developers have been known to delay construction, invoke the sunset clause, cancel the contract, and resell the property at a higher price. The buyer gets their deposit back but misses out on capital growth. In SA, there is currently no requirement for a developer to get court approval or buyer consent before doing this, which is worth being aware of before signing.