Buying Off-the-Plan

Thinking About Buying Off-the-Plan? 

As apartment living and higher density housing is becoming more common, buying Off-the-Plan has become very popular.

There are pros and cons to purchasing off the plan.

Positives to Buying Off-the-Plan

  • Stamp Duty reductions in some States.
  • First home buyers may be eligible for the First Home Owner Grant.
  • The potential to negotiate and lock in a discounted price for the property.
  • You can choose the location and potentially customise part of your design.
  • Builders Guarantee for faults and problems with the building.
  • Potential for Capital Gains as the value of the property may go up in price before settlement.
  • Potential for Depreciation on your Property if it is purchased for investment purposes.
  • There is low initial capital outlay because buyers generally only have to pay a 10% deposit or less to secure the property.
  • Often you will have time to get your finances in order.

Negatives to Buying Off-the-Plan

  • The risk you may end up paying too much for a property at settlement due to a falling property market.
  • The development may be delayed – some developments are delayed for years!
  • The development may not proceed.
  • The development may not be completed due to the developer going into liquidation or goes bankrupt before the project is completed.
  • Variations to the plan that adversely affect you.  Changes to sizes of internal spaces and quality of fixtures and fittings cannot be guaranteed.
  • Loss of time due to construction delays or termination of contracts.
  • No guarantee of a quality end product.
  • Inability to settle due to personal circumstances changing i.e. health, employment or financial circumstances.

Key Things to Consider

The Contract

Off the plan contracts are different to Contracts of Sale for established properties. Given the complexity of these Contracts, it is best to obtain  Contract Advice before you sign.  It can save you money and avoid any nasty surprises.

Off-the-plan contracts are usually heavily weighted in favour of the Vendor.  For example, there are usually many special conditions that give the developer the right to be released from the Contract, ranging from inability to obtain approval for the development or finance approval through to empowering the Vendor to change the plans and fixtures.  Most contracts require acknowledgements from the purchaser that are not required in a standard contract as well.

The Developer

When researching properties for purchase you should take into consideration who the developer is and also the builder they wish to engage.

Take the time to research the developer and find out their experience and the quality of previous construction projects. For example, you can visit and inspect the developer’s previous projects.

The Market

Off-the-Plan purchases can be great, but for some clients they can also be very problematic.  You should carefully consider your options, the prevailing market conditions and expected market trends before committing.

Contact PCL Lawyers to Assist with Your Off-the-Plan Purchase

Our legal experience and advice will help you to make a fully informed decision.

Contact us today for contract advice about your proposed purchase or if you would like us to carry out the conveyancing on your purchase. Our operators have seen thousands of off-the-plan contracts over the years and we will look after your interests.

What if I Want to Get Out of My Off-the-Plan Contract?

If you have purchased off-the-plan and need  legal advice to terminate your contract, contact us today.  We have successfully helped clients rescind (or in other words, terminate) Contracts.

We have a strong track record in this area and we know the more obscure technicalities upon which a purchaser can rely in order to avoid an off-the-plan Contract.

If you need assistance in such circumstances, call us on 1300 907 335 on fill in the enquiry form on this page and we will get back to you promptly.

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