Families have been left with a mountain of “heartache” after a developer revealed it could not hand over land for their dream homes before a termination clause kicks in, with many set to take a financial hit as high as $1.1 million.
Hazel and Wayne Rudolph were one couple who signed up to a contract in June 2021 to buy a block of land from developer ARL No. 6 Pty Ltd for $390,000, which was also marketed by Heritage Pacific.
The land was based in Morayfield, a suburb in the Moreton Bay region in Queensland, in an area advertised as the Rangewood Estate.
The couple had purchased the land jointly with their 30-year-old daughter Hayley Nelson and her husband Brenden, who have two children Layne and Layla.
The Nelsons’ had sold their own house to create a dream property for both families.
The dream
The plan was for both families to build a custom house with two wings in one big home.
“We were so excited about our new block of land and the future we had plans for. We fondly referred to the new home as the ‘Kangaroo House’ as every time we visited the block, little Layne would excitedly point out the kangaroos that frequented it,” Hazel told news.com.au. “Hayley and Brenden had a beautiful maternity photo-shoot on the land, feeling so blessed that they could share the dreams with little Layla before she was even born.”
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The two families expected to be in their new home by Christmas 2021, Hazel said, as they were advised that the land would be registered by August 2021.
Yet, more than a year later they were still waiting.
“Hayley and Brenden sold their home in July 2021, when Layla was just 12 weeks old. They moved into our home, so since July 2021 we have been two families living in one standard home looking forward to our new dream home, but have been frustrated with the continual delays,” Hazel said.
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Bombshell letter
Then a bombshell letter dropped in July that the Queensland-based developer ARL No. 6 would not be able to register the land by the sunset clause date in December this year.
It blamed “long and complex approval processes” at council and the inability to complete works on site due to rain and unsuitable ground conditions for causing delays.
It also pointed to the lack of availability of materials as a result of the Covid-19 pandemic for the delays to the project, in a letter sent from its lawyers to homeowners.
The developer asked homeowners to mutually terminate the contract early as it was “inevitable” it would be legally cancelled in December this year, its lawyers said in a letter.
Hazel, 56, said the news was devastating and while the family initially rejected the move, they felt there was no other option but to mutually rescind this month.
‘Horrendous’ costs
Now, their dream of building a dual family home is in tatters and each family has found a separate existing house to buy.
But Hazel said the higher prices have “hit us hard".
“The extra cost is horrendous. Our original dual living plan had a completed price tag of $1.1 million – this would have been split between the two families. We have now ended up with two separate homes and the difference in cost across the two families is $1.1 million, so double the intended cost,” she revealed.
“Obviously we have two assets instead of the one intended, but we also had two sets of stamp duty on existing property value rather than duty on just the land as intended, and living costs, rates and utilities are doubled.”
Hazel said giving up the land saw their dreams “shattered”.
“We have no idea what Heritage will resell the land for, but based on similar land in the area, it could increase from the contracted $390,000 to $600,000 and then the delays in actual build times would likely push any completion date out by another 18 to 24 months,” she said.
“So in the long run, we really felt we had no option left but to accept the dream was shattered.”
‘Soul destroying’
A number of other families have also been impacted, with some terminating the contract after experiencing a huge amount of stress, while others are facing forking out even more money to continue on with their dream.
“Lives are being impacted and the whole situation is totally soul destroying,” added Hazel.
Sandra* and Jason* had also signed a contract in June 2021 to purchase a block of land through Heritage Pacific for $390,000, but said they also experienced continual delays until they received the same bombshell letter in July this year.
So far they have resisted the developer’s moves to mutually terminate the contract but Sandra describes the experience as a “nightmare”.
She said the experience “had devastating effects on us financially and mentally”.
“Financially we had sold two houses, ours and my parents, in April 2021 in order to prepare enough funds to purchase the block,” she said.
“The market has gone up significantly since then, while the expected settlement date has been pushed into the future repeatedly. We anticipated to be in our new home by now.
“We have lost money through selling our homes too early, paying rent in a rental property, moving into an investment home of ours and losing income, the increased land cost if we need to purchase another block and increased build cost.
“Mentally the stress of the unknown settlement date has been terrible.”
Sandra fears the blocks’ cost could soar as high as $550,000 and $650,000 and wonders how they will be able to afford it.
The couple have requested an extension to the sunset clause but said they have not heard back from the developer’s lawyers.
“Morally they have just been absolutely wrong but legally they can do it,” she added.
News.com.au reached out to ARL No 6 Pty Ltd for comment via their lawyers but mutilple requests went unanswered.
‘Unknown is horrible’
Others such as mum Nicole* claim they face forking up to $500,000 more due to the rise in both the price for the land and increased building costs.
This includes an estimated $300,000 more for the block and $200,000 for construction, she said.
The mum-of-two feels she has no choice to continue as their kids are already enrolled in schools in the area as they also expected to be in their new home by Christmas 2021.
But instead they are stuck in limbo with Nicole admitting she is “all over the place”.
“The stress, the unknown is horrible. We have waited so long, we’re getting told nothing … so I feel like they just want us all gone to sell them higher to someone else,” she said.
“We have set ourselves and kids up thinking we will be living there and now we don’t know where we’ll be.”
Losing money
Meanwhile, Hannah* told news.com.au that they had chosen to terminate and “walk away” due to all the stress as they could not “take it anymore”.
“We got worried as our build had already gone up $60,000 and in October it was due to go up another $60,000 and we were worried they would make us buy the land at an inflated price and we can’t afford that,” she added.
The mum-of-two said they had also lost out financially after they sold their original home to buy the block and build.
“We sold our little home for $535,000 and if we were to sell tomorrow it would be $650,000. We sold just before the market exploded,” she said.
Now, the family have bought an existing property, but said the experience had caused them “heartache”.
A big Queensland issue
The issue of sunset clauses has been plaguing Queensland families, who have lost out on their dream homes and also faced huge price increases to get into the property market.
News.com.au has revealed a number of Queenslanders who have been left shocked and upset after losing out on their dream homes when developer’s have legally terminated contracts.
Di and her husband were left devastated after their developer invoked a legal termination clause in their contract for a three-bedroom townhouse in Brisbane, and claim they were later invited to pay a staggering $200,000 increase for their dream home.
Then there was Leanne Stavrou and her partner who had signed up to two off-the-plan developments in Queensland.
They walked away from one after they were given two days to agree to a staggering $150,000 increase for their dream home, while the other was canned as the developer was “unable to obtain finance”.
Meanwhile, other families have been hit by the sunset clause being invoked as the projects haven’t been completed on time.
One experience left a Queensland mum “crying every day” after their contract was cancelled due to their sunset clause, while one dad said they had been priced out of the area after their contract was axed.
Another couple saw their contract ended just nine months after signing it leaving them angry and distressed.
Sunset clauses are legal in Queensland 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.
More Coverage
A spokesperson from the Office of Fair Trading said the Queensland Government is examining the issue of termination of off the plan contracts via sunset clauses, as part of the Property Law Review, which is currently underway and could introduce changes at the end of the year.
*Names have been changed for privacy reasons
sarah.sharples@news.com.au
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