Tuesday 15 September 2026
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SA Government to Curb Developer Misuse of Sunset Clauses in Off-the-Plan Contracts

Proposed reforms would require developer to obtain homebuyer consent or court approval before terminating contracts

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By LineZotpaper
Published
Read Time3 min
Sources2 outlets
The South Australian government will introduce legislation by the end of the year to prevent developers from misusing sunset clauses in off-the-plan property contracts, following a high-profile case in which a developer axed 75 contracts at Gawler East.

South Australian homebuyers could soon be protected from so-called sunset clauses that allow housing developers to terminate contracts for off-the-plan properties, the state government has announced. The move comes after the government vowed to consider legislative options when developer Wel.Co cancelled 75 contracts with homebuyers at the Springwood Estate in Gawler East earlier this year.

Under current arrangements, sunset clauses allow both developers and homebuyers to terminate contracts if homes are not completed by an agreed date. In some cases, clauses can be misused — allegedly by developers seeking to make a larger profit when property values increase.

The proposed reforms would prevent a developer from triggering a sunset clause unless it had the consent of the homebuyer, or if the Supreme Court ruled that such a step was "just and equitable".

"They'll need to go to a court and ask the court to rule that it's appropriate they use the sunset clause," Consumer and Business Affairs Minister Michael Brown said. "The message we want to send to the developers is: If you want to come to South Australia and develop and provide housing for people and, yes, make some money while you're doing it, then we're happy to work with you. But if you want to come here to rip people off, we're not interested and the law will come down on you."

The minister said the Wel.Co situation had largely been "rectified" but that stronger consumer protections were still needed. "It's unfortunate it took media attention and also the government to step in to get Wel.Co to end up where they did," he said. "That's one of the reasons why we're changing the legislation — to make sure we don't end up with a Wel.Co style problem again."

In response, Wel.Co said the situation at Springwood "arose following significant changes to planning and infrastructure requirements affecting the project." The developer stated: "These were complex circumstances, and Wel.Co has continued to work closely with government, council and affected purchasers to identify pathways forward. Our focus remains on working constructively with all parties to achieve the best possible outcomes for purchasers and progress the delivery of Springwood."

South Australia follows similar steps taken in New South Wales and Queensland. The government will conduct consultation in the coming weeks.

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Analysis

Why This Matters

  • Homebuyer protections: Proposed reforms would make it harder for developers to walk away from contracts when property values rise, shielding buyers from sudden loss of their purchase and potential price increases.
  • Market confidence: Clearer rules around sunset clauses could restore trust in off-the-plan purchases, which are a key entry point for first-home buyers in a tight housing market.
  • Precedent effect: South Australia is joining NSW and Queensland in tightening the law, potentially putting pressure on other states to follow suit.

Background

Sunset clauses are standard provisions in off-the-plan property contracts. They set a date by which the development must be completed; if it is not, either party can terminate the contract. Originally designed to protect buyers from indefinite delays, the clauses have been criticised for enabling developers to cancel contracts when rising property values mean they can re-sell at a higher price. The ABC has reported on misuse of these clauses across multiple states, and a July 2026 case at Gawler East — where Wel.Co axed 75 contracts — prompted the SA government to act.

Key Perspectives

Homebuyers: The reforms provide stronger legal protection, with developers needing either buyer consent or a court order to terminate. This reduces the risk of buyers being locked out of rising markets after a developer cancels. Developers: The industry argues legitimate reasons exist to terminate — such as significant planning or infrastructure changes that make a project unviable. Wel.Co's response points to such complexities in the Springwood case. The new process adds a court hurdle, which could slow projects and increase costs. Critics/Skeptics: Court oversight may prove expensive and time-consuming for both parties. There is also a risk that developers pass on legal costs to buyers. The effectiveness of the law will depend on how quickly and consistently the Supreme Court handles these applications.

What to Watch

  • Consultation process: The government's upcoming consultation will reveal whether industry and consumer groups push for amendments before the bill is introduced.
  • Timing of legislation: The government has committed to introducing the bill by the end of 2026 — any delay could signal political or industry resistance.
  • Court workload: If the law passes, the number of applications to the Supreme Court will be an early indicator of whether developers seek to use the new process or simply avoid off-the-plan sales in SA.

Sources

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