Real Estate Agent’s and property developer’s very poor form

PHOTO: Parkside Residences, Rochedale – Queensland

A couple has been slugged with a $210 a week rent rise after their home ownership dream was shattered.

Thomas Fung and his partner signed a contract in July 2021 to buy a four bedroom townhouse in an off-the-plan development in the Brisbane suburb of Rochedale.

Mr Fung, 29, said they had purchased the property for $645,900 and put down a 10 per cent deposit to buy into the development known as Parkside Residences.

But the couple will no longer be able to live in their dream home because of the legal technicality.

They have also been hard been hit by the rental crisis — with their rent hiked by a whopping $210 a week.

Now, they have been left wondering how long it will take them to own a home after the developers Cannonview Developments Pty Ltd, activated the sunset clause to legally terminate the contract in February this year.

The young couple were also shocked to receive an email just four hours after their contract was terminated from a real estate agency, which they claimed was selling their townhouse for the staggering new price of $899,000.

“Rochedale has become one of Brisbane’s most popular suburbs given its proximity to the CBD, ongoing infrastructure and optimal capital growth. Now is the time to secure THE LAST REMAINING dream town home,” the email said.

It also revealed the townhouses were “almost complete” and due to be delivered by April this year.

But the price increase would have meant the couple needed to find an extra $254,000 at the time to own the home.

“It was just a shock … I said ‘Where can I find another $200,000 to get it again?’ And with the rental crisis and interest rates rising now we can’t save up money. I am losing money and losing the opportunity for the home,” Mr Fung told news.com.au.

“Basically it’s all about money and I just want to warn everyone.”

But Cannonview Development’s lawyers told news.com.au that its client was not aware of the property being re-marketed before 6 March this year.

“It is common knowledge that the building industry is in crisis because of supply chain disruptions, skilled labour shortages and skyrocketing costs of materials,” they said. “Accordingly, any change in price reflects the increasing costs that our client is currently being challenged by.”

In Queensland, there is nothing the couple can do about the termination of their contract as the developer has done nothing wrong under the law.

“For me I want to warn the people that if they try to purchase an off-the-plan property in Queensland this is what they can do,” he added.

“Now with the rental crisis, just for my rent … for a two-bedroom apartment it was $485 before and during Covid and now they are asking for $695 if we want to renew.

“So just in the space of two years it increased by $210. Fortunately my partner and I are professionals and can afford the money but we won’t be able to save much.”

The dietitian, whose partner works as a social worker, said while his parents weren’t wealthy they had dipped into their retirement fund to help them secure the townhouse and instead their dreams have been shattered.

But Cannonview Development’s lawyers said Mr Fung had originally requested the sunset clause date be reduced to 30 June 2022, however the parties came to a compromise by setting it for 31 December 2022.

“The possibility that property registration may not occur by the sunset date is an inherent risk associated with off-the-plan contracts,” they added.

“In this case, the result of the buyer’s decision was that the sunset date fell significantly short of what was required to complete the development. It was the buyer’s decision to accept this risk.”

In Queensland, sunset clauses are legal and have been used on other developments in Brisbane and the Gold Coast.

Other states around Australia have moved to put more protections in place for buyers who are purchasing off the plan.

In New South Wales and Victoria, special laws were established requiring sellers to get consent from the purchaser or the Supreme Court before using the sunset clause to terminate an off the plan contract.

Mr Fung has said Queensland law really needed to catch up with other states to offer buyer’s more protection.

“It’s just very unfortunate. We paid rent for one year and all the extra costs add up,” he said.

“I did purchase some furniture last year and I’m lucky that the place wasn’t charging any storage fees for the new furniture, but I’m not sure if I can use it in another house as it’s tailor made for the floor plan. It has messed up our plans.”

Currently working with NDIS clients, Mr Fung said he was particularly angry as he had consistently chased for updates on the property.

He claimed his own visits to the site suggested the homes would be complete before the sunset clause was reached in December last year.

In a trail of emails seen by news.com.au, he was told by a real estate agent in August last year that the townhouses were due to be complete by November 2022.

In September, the couple were told the homes were still due to be completed in November and be titled in December – and with the Fung’s lease set to end in December – the property manager advised them to go month-to-month on the rental contract.

However, in November the couple were told completion was pushed out to January due to supply chain issues and trade shortages. Then this was further delayed until February with settlement expected in March.

A month later the couple were told the completion of the homes would not occur until April with settlement in May.

But just three days after an email update to Mr Fung, the bombshell letter from the lawyer’s developers dropped advising the couple their contract had been terminated.

Cannonview Developments lawyers said completion of the development Parkside Residences has been subject to significant delays associated with material supply and trade shortages as well as prolonged delays with local authority sewer construction.

“As a result, any anticipated time frames provided by our client were purely estimates, as it would not have been possible to provide a definite registration date,” they said.

“Our client endeavoured to provide as accurate a time frame as possible, however registration of this development has still not occurred, which is some six weeks since (Thomas) Fung’s contract came to an end and over three months from the sunset date in that contract.”

Unfortunately for the couple, it’s not the first time they’ve had their property plans fall through.

“We did try to look for land back in 2020 and we got into the contract but that place was never settled unfortunately and then I had to break the contract as there was no response from the seller,” he explained.

“It was a private seller and we waited almost a year and tried to contact the seller’s agents and they said they couldn’t contact them either.”

The couple are not alone in being stung by the sunset clause issue, with three other Queensland families left angry and distressed after the developer legally ended the contract for their dream home.

A Queensland mum was left “crying every day” after her contract was cancelled due to their sunset clause.

Last year a spokesperson from the Office of Fair Trading told news.com.au that the Queensland Government was examining the issue of termination of off-the-plan contracts via sunset clauses, as part of the Property Law Review.

They added QLD Attorney-General Shannon Fentiman had advised that she intended to introduce legislative amendments to address the issue by the end of the year – but four months into 2023 and this still has not happened.

Instead, it appears the QLD government is stalling on implementing any reforms with no resolution in sight.

A spokesperson for the QLD Office of Fair Trading said in August and September 2022 that public consultation was held on off-the-plan residential property contracts, including the use of sunset clauses by property developers and early release of deposits.

“Responses to the consultation process are informing government deliberations and decision-making. However, property law is a complex and technical area that differs between jurisdictions, and this complexity was reinforced in the consultation responses,” they told news.com.au.

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