Sales and Purchases
There are plenty of advantages to buying a property off the plan – like having more time to arrange your finances and possibility buying a brand new property at less than market value when you eventually settle.
However, buyers need to fully understand what they are signing up to and the pitfalls that might confront them.
What is buying off the plan?
Buying off the plan means that you are purchasing a property that is yet to be built and your purchase is based only on the surveyors plans, architectural drawings and a schedule of finishes. In other words, you enter into an agreement to buy the property yet to be constructed and subdivided.
What is different from a standard contract for sale?
In general, buying off the plan is riskier than making a conventional purchase of an existing unit due to unpredictability of the economy, the construction industry and the housing market generally.
In a traditional transaction, the contract of sale can be settled in 30 to 60 days. On the other hand, it can take years if you are buying off the plan. Also, you can’t actually inspect the property.
When buying off the plan in Queensland and NSW, you will receive:
- a Contract of Sale; and
- a Disclosure Statement.
Off the Plan contract are not standard. Each firms of solicitors acting for a developer has their own template document. Because each seller will include different sets of conditions in their contracts, it is important for you to consult our legal team before you sign anything.
Because you cannot view the property when you buy off plan, you are at a disadvantage but there are certain legal requirements to protect you. For one, the seller is legally obligated to provide a disclosure plan and disclosure statement with the contract of sale which must contain certain information, including but not limited to, the identification of the property being purchased.
The disclosure statement and contract for sale are legally binding documents. This means any party involved in the transaction must abide by it after they sign it. Furthermore, in the event of a dispute, the parties are allowed to rely on the information contained in these document.