What to consider when buying off the plan
Published 26 Apr 2018
With demand for property in NSW continuing to grow, we're seeing more and more residential properties sold 'off-the-plan'.
This process - which means to buy property before construction is completed - can be risky if you don't understand all the ins and outs around it. Of course, while some people are put off simply because all you can often review are blueprints and building plans, the risks can be much deeper than this. As such, it's important to engage the services of an experienced property lawyer.
Here's what to look out for when buying off-the-plan.
Checking the contract's terms and conditions An off-the-plan property contract is very complex. As it deals with a number of factors that simply don't exist yet, it's critical that the terms and conditions mitigate against the worst.
Whether this is what happens if the property isn't completed on time, how you can get your money back if problems emerge or who holds your deposit during construction, these are all the questions that a solicitor can ask and enquire about on your behalf.
When plans change unexpectedly
One of the issues with an off-the-plan property development is that circumstances can change over time. Perhaps there is a discovery that prevents some land from being developed or council regulations prevent part of the construction. Worse still, you may find that the property developer runs out of funds to complete the project, leaving you without a satisfying end result.
When factors change, a lawyer can ensure that you're still getting a fair deal.
If the final construction doesn't match the plans
In the event that the development either doesn't match the blueprints or you believe the workmanship is not up to standard, you may have to take legal action or seek compensation.
As any claim will need to be based on the terms and conditions of the contract you signed, a lawyer will help you to wade through this legal jargon and to the best solution for you.
If you need to activate the 'sunset clause'
The sunset clause sets a date by which the project needs to be finished. If, for any reason, the development extends beyond this time, the clause can be activated and the buyer can either get their deposit back or sign a new contract with refreshed terms.
Again, this can be a tricky process so it helps to have an experienced lawyer to guide you through each step.
If you would like more information about the legal side of buying property off-the-plan, get in touch with Malouf Solicitors today.
Please call us on 02 8833 2000 to speak with a lawyer
I would just like to say thank you to Anthony who assisted my son in his matter. He is a first home buyer and was pressured into signing a contract prior to obtaining legal advice. The contract was certainly was not the normal straight forward type. To be able to obtain the help and assistance he did from Anthony and rescind the offer the next day, was wonderful. We were able to have a stress free Christmas. I am unable to thank him enough for this. My son and our family will be contacting Anthony when we find the next property.
Kim of Sydney