Sunset clauses explained — off-the-plan contracts in NSW and Victoria

What a sunset clause is

In an off-the-plan contract, the sunset clause sets a long-stop date by which a defined event — usually registration of the plan of subdivision, sometimes the issue of an occupation certificate — must happen. If it doesn't, the contract can be ended and the deposit returned. It exists because you're buying something that doesn't exist yet, and neither side should be bound forever if it never does.

The abuse the law fixed

The historic problem: in a rising market, a developer could slow a project down, let the sunset date pass, rescind, keep the property — and resell it at the new, higher price. The buyer got their deposit back and lost years of market growth. Both NSW and Victoria have legislated against exactly this.

NSW — section 66ZL

For residential off-the-plan contracts, section 66ZL of the Conveyancing Act 1919 (NSW) means the vendor can't rescind under a sunset clause unless you give written consent — after at least 28 days' written notice explaining why — or the vendor gets a Supreme Court order. The court has to be satisfied rescission is just and equitable, and the vendor generally bears your costs of the proceedings unless the court decides otherwise.

Victoria — sections 10A–10F

Victoria's version, in sections 10A–10F of the Sale of Land Act 1962 (Vic), works the same way: 28 days' notice with reasons, then your written consent or a Supreme Court order. The structure is deliberately mirrored — in both states, a vendor-friendly sunset clause can no longer be used as a unilateral exit.

Your side of the sunset clause survives

The restrictions bind the vendor. If the sunset date passes, you can generally still walk away and take your deposit back. That right is worth understanding before you agree to any extension the developer asks for.

What to actually look for now

Because the rescission route is closed, the pressure has moved into the drafting. In contracts we review, the patterns worth attention are:

1. Extension rights. Clauses letting the vendor unilaterally push the sunset date out — we've seen up to 36 months of extensions. Your deposit stays locked while the date moves.
2. The sunset event definition. "Registration of the plan" is narrow; definitions that add occupation certificates, other approvals, or "any other event the vendor nominates" are not.
3. A date far beyond the build. A 4-year sunset on a project that's already at lock-up isn't protecting the build — it's optionality for the vendor.
4. Deposit terms across the wait. Where the deposit sits, and what interest (if any) you see, matters more the longer the sunset runs.

Common questions

The developer sent me a notice asking to rescind. Do I have to agree?

No. Consent is yours to give or withhold. If you withhold it, the vendor's remaining route is the Supreme Court, where they must justify the rescission. Take advice before responding — the notice must state reasons, and those reasons are exactly what a court would test.

Can the sunset date be extended without my consent?

If the contract grants the vendor an extension right, yes — that's a contract term, not a rescission, so the statutory protections don't bite. This is why the extension clause deserves as much scrutiny as the date.

Does this apply to every property type?

The protections target residential off-the-plan contracts in both states. Commercial and other purchases fall back on the contract terms, so the drafting is everything there. For the wider off-the-plan picture, see our NSW and Victorian guides.