How to Protect Yourself When Buying an Off-the-Plan Property
Buying off the plan can be a smart way to enter the market, secure a new home or lock in a future investment, but it carries unique risks that deserve careful attention. Independent advice from property lawyers can help identify issues early and negotiate better terms where possible. With a clear plan, buyers can safeguard deposits and reduce the chance of unpleasant surprises. This article will detail practical steps to help buyers protect their position.
Research the Developer and the Project
Start with thorough due diligence on the developer’s track record. Look for completed projects, not just glossy renders, and review how those buildings have aged. Confirm planning approvals, zoning and any conditions that may affect timing or design. Ask for a realistic construction program, not just an indicative timeline, and check who the builder is and whether appropriate warranties and insurances will be in place. Independent advice from experienced property lawyers can help assess whether the paperwork and promises align with what is actually deliverable.
Scrutinise the Contract, Plans and Inclusions
The contract governs everything, so read it line by line. Confirm that floor plans, schedules of finishes and appliance brands are attached and consistent. Many contracts allow a small variation in area; understand how that is measured and what happens if the reduction is more than the tolerance. Check whether car spaces or storage cages are allocated or merely “subject to availability”. Ensure any upgrades and incentives are written into the contract, not just in marketing brochures. Skilled property lawyers can translate legalese into plain English and negotiate amendments that better protect the buyer’s expectations.
Finance and Valuations
Financing off-the-plan brings extra moving parts. Pre-approvals can expire, lending policies can change and bank valuations at settlement may come in lower than the purchase price. Budget for this gap so that a shortfall doesn’t derail the purchase. Confirm what happens if finance isn’t approved, as many contracts don’t have a finance condition. It can be helpful to have property lawyers review the contract alongside your finance advisor to ensure the legal obligations and finance conditions work together.
Understand Sunset Clauses and Delays
Sunset clauses set an outside date by which the plan must register or the project must finish. If that date passes, the contract may allow either party to end the deal, often with the deposit returned but no compensation for lost time or opportunities. Some states require developer consent orders or buyer consent before exercising a sunset clause, while others don’t. Ask how the sunset date was calculated and whether there’s flexibility to extend only for factors outside the developer’s control. Consider adding rights to terminate if there are excessive delays or to claim interest for extended holding periods.
