The Law Association of New Zealand (TLANZ) has released updated property transaction forms that will apply to agreements entered into from 21 April 2026. While the documents retain their familiar structure, a number of changes will have practical implications for buyers, sellers, and their advisers.
Sunset clauses – sometimes not so sunny!
Sunset clauses in off-the-plan sale and purchase agreements can give either party a right to cancel if a project isn’t finished by a set date. With renewed attention on how developers may use these clauses, it’s important for purchasers to understand how they work and how to negotiate better protection.
In 2025, a private member’s Bill relating to sunset clauses was introduced to Parliament and subsequently voted down. The Bill was aimed at offering better protection to off-the-plan property purchasers who might be at risk of having their purchase agreement cancelled by the vendor developer using a sunset clause, so that the developer could accept a higher price from another purchaser.
What is a sunset clause?
A sunset clause is a clause that can be written in to an Agreement for Sale and Purchase which gives the vendor, the purchaser, or both, the ability to bring the Agreement to an end if certain deadlines are not met, for example, the developer completing the development by a certain date. In simple terms, if the dwelling isn’t ready by a certain date, the Agreement can be ended by the party who has the benefit of the sunset clause.
Sunset clauses can be written for the benefit of:
- the vendor (only allowing the vendor to cancel the Agreement); or
- the purchaser (only allowing the purchaser to end the Agreement, the safest option for a purchaser); or
- both parties (either party can end the Agreement).
For the best protection for a purchaser, it is a good idea that the sunset clause be drafted ONLY for the benefit of the purchaser. This ensures that if there are delays, you decide whether to wait it out or end the Agreement and get your deposit back, preventing the developer from cancelling the Agreement to accept a better price elsewhere.
Off-the-plan contracts are complex. Our legal experts at Harkness Henry have the experience in drafting and reviewing contracts and sunset clauses, to make sure that your contract has the right protections for you.
This article is current as at the date of publication and is only intended to provide general comments about the law. Harkness Henry accepts no responsibility for reliance by any person or organisation on the content of the article. Please contact the author of the article if you require specific advice about how the law applies to you.
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Jo Wadsley
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