A Queensland family is facing the possibility of losing $45,000 worth of their home deposit because of a bitter battle with their property developer.

Daniel McInnes and Anisha Thapa were devastated to learn their dreams of owning a new four-bedroom townhouse in Brisbane had gone up in smoke when their developer terminated the off-the-plan contract.

Things took another turn after Mr McInnes, a 48-year-old father of two, created a group on social media to find out whether any of the other 81 deposit payers were experiencing the same plight.

Kinslake, a related entity of major Queensland development firm Kinstone Group, was originally going to return Mr McInnes’s full $75,000 deposit and $5,000 in interest.

The family say they have been priced out of the property market. (ABC News: Alexander Papp)

But in March, after seeing Mr McInnes’s complaints online, Kinslake said it would be keeping $45,000 for damages.

“It’s just unfair,” Mr McInnes said. 

“Effectively you have zero rights and developers can do whatever they want.“

A Kinslake spokesperson said the company was being a “responsible developer” by cancelling contracts as soon as it became apparent the project would not get off the ground.

“Disappointingly, they [the McInnes family] have also sought to damage our reputation in online social posts,” the spokesperson said in a statement.

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The family has been battling the developer for more than a year. (ABC News: Alexander Papp)

‘A great deal’

In 2022, the family paid a deposit to secure a $758,000 off-the plan townhouse which was part of Kinslake’s Aluna development in the suburb of Rochedale.

“It just looked like a great deal and we were super excited and happy when we signed the contract,” Mr McInnes said.

But a year later, the family received a “deed of rescission” and a demand from the developer to sign a mutual contract termination.

Kinslake said “material and labour shortages” had made the project untenable.

The developer sent Daniel McInnes and Anisha Thapa a legal letter in March. (ABC News: Alexander Papp)

Mr McInnes’s family refused to sign the mutual termination agreement, claiming the developer had no right to cancel their contract.

In 2024, Kinslake applied to the local council for a change to their development plans, which the Brisbane City Council rejected.

The developer then pointed to a clause in the contract that justified their cancellation, which stated:

“If an Authority refuses to grant or revokes any necessary permit, approval or sealing or imposes any condition on any necessary permit … then we may cancel this contract.”

Brisbane City Council said in a statement to the ABC that the developer wanted to remove car parks and increase the number of homes on the site, which would have “unacceptable impacts”.

“The applicant had a right to appeal this decision, but did not,” the council spokesperson said.

“This approval granted in 2020 for the 82 townhouses remains valid, so the developer would be able to deliver that approved development.”

‘Priced out’

The McInnes family has since engaged three lawyers, racked up around $10,000 in legal costs, and said they had now been priced out of the property market.

The average price of a Rochedale unit has risen by 37 per cent between 2022 to now, according to property data firm Cotality.

House prices have gone up by 11 per cent in Rochedale in that same period of time, now sitting at an average of $975,000.

“My financial losses are $300,000 for the townhouse based on the market increases, plus legal fees, which for us is a huge amount of money,” Mr McInnes said.

Kinslake said it had requested the bank details of the McInnes family to return their deposit and that the family had asked for an additional $200,000 in compensation, “which they are not entitled to under the terms of the contract”.

The Facebook group had only five members. (ABC News: Alexander Papp)

In March, Mr McInnes created a Facebook group calling for other contract holders from the Aluna development to join.

Only five people had signed up and the group had been active for several weeks when he received a letter from lawyers representing Kinslake.

“By creating the FB Group and making potentially defamatory allegations against our client in its public description, your clients have breached (a) clause … such that they are in default of the contract,” Kinslake’s lawyer wrote.

“Your clients must compensate our client for any loss they suffer as a result.”

The letter went on to say Kinslake was willing to “resolve” the dispute by returning the deposit “less $45,000 for our client’s loss”.

Mr McInnes deleted the Facebook group immediately but said the damage was already done.

“I’m just mad and fed up,” he said.

Kinslake is affiliated with major property developer Kinstone Group. (ABC News: Alexander Papp)

Kinslake denies claims

Kinslake denied any suggestion it had reneged on the deal so it could sell the townhouses on at a higher price following the suburb’s property boom.

“We are instructed to advise that our client maintains that the Cancellation Notice is valid and denies the allegation that it contrived a situation to justify issuing the Cancellation Notice,” Kinslake’s legal representative wrote to Mr McInnes.

The site is still sitting empty.

Mr McInnes has made a complaint to the Office of Fair Trading, and to the housing and justice minister.

In a statement to the ABC, the Office of Fair Trading said it was aware of his complaint but would not comment further.

“‘Off the plan contracts are not standard contracts. It is critical for buyers to seek legal advice before entering into them so they are aware of what might apply under them,” the spokesperson said.