Buying Off the Plan? What to Look For
- WHAT ARE YOU BUYING?:
You should carefully examine the architect’s plans and the list of specifications to ensure you are satisfied with what you are contracting to buy. Also carefully examine the proposed Plan of Subdivision to identify your lot, its location and aspect and its size. A display home/unit may not truly represent what will be delivered to you once construction is completed. The most common form of dispute is the final/actual size of the unit once completed. It is not uncommon to find that the size of the unit at completion of the project may vary from the size of the unit as disclosed in the off-the-plan contract. This is often the result of council requirements, building code and other building constraints.
- CONTRACT SPECIAL CONDITIONS:
Off the Plan Contracts usually contain a number of Special Conditions which can leave you confused. Make sure you read and understand the terms before you sign the Contract.
- LOT ENTITLEMENT & LIABILITY:
Are the lot entitlement and liabilities shown on the Plan of Subdivision appropriately apportioned for each property that forms part of the building? Your voting rights and strata levies are based on the lot entitlements. Lot entitlements are determined by the size of the property and its location in the complex.
- SUNSET CLAUSE:
A Contract of Sale should contain a sunset clause, which will enable the Purchaser to cancel the Contract if the Plan or development is not completed by a certain date. Make sure the Off the Plan Contract contains such a Clause. This clause ensures that both the Purchaser and the Vendor has the ability to exit from the contract after a specified time if the building is not completed. This promotes certainty in the transaction.
- STAMP DUTY BENEFITS:
There are numerous stamp duty benefits are available to off-the-plan buyers of real estate. The nature and size of the benefits are constantly changing due to government laws and regulations. It is recommended that you contact yours solicitor or conveyancer to determine precisely the nature and the size of those benefits.
Legal representation in off-the-plan contracts is paramount. Many issues or disputes that may arise between Vendors and Purchasers in off-the-plan contracts could be minimized or avoided if you seek prompt and expert legal advice both before entering into the contract and when faced with disputes. Solicitors are best equipped to deal with any legal issues that may arise and are in a better position to protect your legal interests.
For expert and common sense approach to property legal services and especially negotiating off-the-plan contracts, contact RM Legal and Solicitors Parramatta.