The ‘Sunrise Clause’ Loophole Sparking Outrage in QLD Real Estate

BRISBANE :  A controversial legal mechanism known as a “sunrise clause” is under intense scrutiny following the mass termination of luxury apartment contracts at the Ruby Ruby development in Milton, Brisbane.

While many buyers are familiar with “sunset clauses”—which allow either party to exit a contract if a project isn’t finished by a certain date—the “sunrise clause” is increasingly being viewed as a lopsided tool for developers to combat inflation at the expense of early-bird investors.

Solicitor Duke Myrteza, who is personally affected by the Ruby Ruby terminations, says the validity of these clauses remains a question for the judiciary.

“It remains to be seen whether clauses like this will be accepted by the courts,” Myrteza said. “The right is only given to the developer to terminate in these circumstances, unlike a sunset clause where both parties are entitled to terminate.”

Unlike recent legislative crackdowns on sunset clauses designed to protect buyers from “greedy” developers, sunrise clauses often fly under the radar during the initial signing phase, hidden in the fine print of off-the-plan disclosures.

The developer involved, Kokoda Property Group, maintains that the terminations were a business necessity. The group cited:

Post-2024 inflation has significantly thinned margins for high-end builds.

A lack of skilled labor has delayed demolition and initial works.

The switch to a new builder, Maxcon Construction, required a re-evaluation of the project’s financial viability.

For buyers like the Sinclair family, the legal technicalities translate to a $1.2 million loss in equity. By the time a developer triggers a sunrise clause, the market has often moved so far upward that the returned deposit is no longer enough to buy a comparable property in the same area.

Legal experts advise anyone considering an off-the-plan purchase to have their solicitor specifically look for “unilateral termination rights” that don’t require buyer consent. For now, the Sinclairs and other Ruby Ruby buyers are left waiting to see if a class-action or a test case will challenge the developer’s right to “tear up” their dreams.