What You Need to Know before Buying off the PlanIf you’re in the market for a new home or apartment, you might be considering buying ‘off the plan’. This process involves signing a contract for a property before construction has been completed. Before putting pen to paper, it’s important to seek legal advice to ensure that you are protected. We are property law experts, and we can review your contract and handle all the legal elements of your purchase, minimising the stress and maximising the security for you.
When Can You Buy Property This Way?
Off-plan purchases only occur before the building process is complete. You can invest in these properties at the following stages:
- During the planning stages, when an empty lot of land exists
- When an existing property is being demolished for new development
- When construction is partially complete
What are The Benefits for Me?
Off the plan purchases are attractive to potential homeowners and investors alike. This is primarily because of the financial benefits involved in the process. The main benefits are:
- Greatly reduced stamp duty – one of the biggest upfront costs involved in buying property
- A purchase price that is usually less than market value
Understanding the Risks
Buying apartments and houses before construction is a bit like ordering a meal at the restaurant. Your knowledge of the property is reliant entirely on floor plans, artist’s impressions and other information. As well as this, you may face the following challenges:
- Unexpected changes to plans
- Complicated contracts
- Limited communication with the builders
- Complications with the developer
- Market volatility that damages the property’s value
It can be difficult for buyers to terminate or be released from their contract. This is why it is essential to seek legal advice before making a purchase.
What We Recommend
Before entering into an agreement, you should consult a range of professionals to safeguard your interests. Some steps you should take include:
- Research the developer and check with licensing authorities to confirm their credibility
- Carefully inspect and investigate any details of the homes you already have – including models and plans – so you know exactly what you’re purchasing
- Consult our team on legal issues, particularly around the contract of sale
How We Can Protect You
It is important to review every contract of sale, especially when you don’t know exactly what you’re getting. We are a team of property law experts, who will work to get answers, make progress and cut through the legal jargon. We will examine your contract in fine detail and search for unreasonable clauses or important omissions. We can:
- Ensure that your contract identifies all charges and costs
- Require developers to start work by a specific time
- Make sure the lot entitlement and liabilities are shown so you know your exact entitlements to the land after subdivision
- Include remedies and penalties that deter late completion and disputes
- Implement a ‘sunset clause’ that allows you to cancel the contract if developers have not met construction requirements