Buying Off-the-Plan Property with Confidence: 5 Things to Check
Buying off-the-plan means purchasing a property before it is built. It can be a great way to enter the property market, especially with a longer settlement timeline and potential savings. But because you are buying something not yet completed, it is important to do your homework. Here are five key things to check before signing anything.
- Sunset clause and completion deadline
The sunset clause is the maximum time the developer has to complete the build. If the project is not finished by that date, the contract may be cancelled. You should check how long the developer has, whether they can extend the date, and what rights you have if delays happen.
- Changes to layout or finishes
Off-the-plan contracts often allow developers to make certain changes. These could include layout adjustments, material substitutions, or slight size reductions. Make sure you understand what variations are allowed, and whether you can cancel the contract if major changes occur.
- Deposit payment and refund conditions
In most cases, a 10 percent deposit is required. This is usually held in a trust account until settlement. Check who holds the deposit, what happens if the project does not go ahead, and whether there are any early release clauses.
- Future costs and strata rules
Review the draft strata or owners corporation documents. Look for estimated ongoing fees, shared facilities, and any embedded service contracts. It is also worth checking if there are restrictions around pets, Airbnb, or short-term leasing.
- Pre-settlement inspection and defect rights
Before settlement, you should have the right to inspect the property. Make sure you understand what happens if defects are found, how warranty periods work, and who is responsible for fixing issues.
Tip: Always have the contract reviewed by a lawyer before you commit. Off-the-plan contracts can be complex and heavily weighted in favour of the developer.
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Disclaimer: This article is intended to provide general information only about buying off-the-plan property in Australia. It does not constitute legal advice and should not be relied upon as a substitute for professional guidance. Off-the-plan contracts can be complex, and laws regarding stamp duty, disclosure obligations, and buyer protections vary between states and may change over time. We recommend that you seek independent legal advice before signing any contract or committing to a purchase. While every effort has been made to ensure the accuracy of this content at the time of writing, we do not accept responsibility for any errors, omissions, or changes in legislation that may occur.
FAQ:
Q1: What is a sunset clause in off-the-plan contracts?
A sunset clause is the maximum period the developer has to complete the property. If the deadline passes, the contract may be terminated by either party.
Q2: Can a developer change the layout or finishes after I sign?
Yes, most off-the-plan contracts allow for some changes. Always check what variations are permitted and whether you can withdraw if major changes occur.
Q3: What should I check in the strata or owners corporation documents?
Look for estimated fees, shared facility use, embedded services, and any by-laws affecting pets, short-term rentals, or renovations.
Q4: Are there differences between states like NSW and VIC?
Yes. While the core process is similar, stamp duty concessions, sunset clause protections, and disclosure rules vary by state.
(Note: The information in this FAQ is general only and may not reflect the latest legal updates. Please seek advice specific to your situation.)