South Australian developers will need either the homebuyer’s consent or a Supreme Court ruling before they can pull the pin on an off-the-plan contract using a sunset clause, under reforms the state government says it will put to parliament by the end of the year. Consultation on the changes starts in the coming weeks.
The plan was reported by the ABC, which said the push follows a developer axing 75 contracts at the Springwood Estate housing development at Gawler East, on Adelaide’s northern fringe.
Sunset clauses sit in most off-the-plan contracts. They let either side walk away if the home isn’t finished by an agreed date. The problem the government says it’s targeting is the version where a developer, not the buyer, triggers the clause: the buyer signed at a 2023 price, the block is worth more now, and the contract dies before anyone turns a sod.
Court sign-off before the clause can be pulled
Under the proposal, a developer couldn’t trigger a sunset clause unless the buyer agreed, or the Supreme Court ruled the step was “just and equitable”, the state government said.
“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.
Brown framed it as a line in the sand for developers looking at South Australia.
“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 ABC reported that the move comes amid heavy housing development across Adelaide, and follows similar steps in New South Wales and Queensland. Details of the SA bill will be worked through during the consultation period, which the government runs through the Consumer and Business Affairs portfolio at sa.gov.au.
The Gawler East cancellations behind the push
Brown said the legislation push followed property developer Wel.Co axing 75 contracts at Springwood. He said that while the situation had largely been “rectified”, “there was still a need to strengthen consumer protections”.
“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, adding that it was one of the reasons for the change, “to make sure we don’t end up with a Wel.Co style problem again”.
In a response reported by the ABC, the developer said the Springwood situation “arose following significant changes to planning and infrastructure requirements affecting the project”.
“These were complex circumstances, and Wel.Co has continued to work closely with government, council and affected purchasers to identify pathways forward,” the company said.
“Our focus remains on working constructively with all parties to achieve the best possible outcomes for purchasers and progress the delivery of Springwood.”
Why 75 dead contracts matters on the tools
A cancelled off-the-plan contract doesn’t just hurt the family who signed it. It kills a work sequence before it starts.
An estate lot runs in a fixed order: civil works, services, titles, then the slab, frame, lock-up, and fitout. Nothing behind the title happens until the land division lands. When contracts get terminated at that point, the concreters, frame and truss crews, brickies, sparkies and plumbers who had those lots pencilled into next year’s run never get the call. The job simply disappears off the forward board.
The 75 cancelled contracts at the Springwood Estate at Gawler East are the case the South Australian government now cites as the trigger for its sunset clause reforms, the ABC reported on 1 September 2026. For a small residential builder working a single estate, that’s a scale of cancellation you don’t absorb by shuffling a few starts.
The reform cuts the other way too, and builders should read it carefully. If a developer can’t exit a stalled project by letting the sunset date roll past, the pressure sits squarely on getting the civil works, approvals and infrastructure done. Wel.Co’s own explanation points at exactly that pressure point: planning and infrastructure requirements changing mid-project.
Expect developers to respond by writing longer sunset dates into new contracts, and by being harder-nosed about locking in servicing and approvals before they open a sales office. That flows into what builders and subbies get told about start dates.
What to watch
The consultation is the part worth a look. Whether the bill covers house-and-land contracts as well as apartments, how the “just and equitable” test gets defined, and whether it applies to contracts already signed will decide how much protection buyers actually get, and how developers price the risk into the next round of estates.
Until the bill lands, the sunset date in a contract is still the date that counts. If you’re a builder with work tied to an estate release, the sunset dates on the buyers’ contracts are worth knowing, because that’s when your pipeline can vanish.
Frequently asked questions
What is a sunset clause in an off-the-plan contract?
It’s a clause in most off-the-plan contracts that lets either side walk away if the home isn’t finished by an agreed date. The SA reform specifically targets cases where the developer, not the buyer, triggers it.
When will South Australia’s sunset clause reforms take effect?
The government says consultation starts in the coming weeks and it plans to introduce the bill to parliament by the end of the year.
What happened at Gawler East that prompted the change?
Developer Wel.Co cancelled 75 contracts at the Springwood Estate. Minister Michael Brown said the situation had largely been “rectified” but showed a need to strengthen consumer protections.
Will developers still be able to cancel off-the-plan contracts?
Yes, but under the proposal they’ll need either the buyer’s consent or a Supreme Court ruling that cancelling is “just and equitable”.
Sourced from ABC News. Original article.
