Purchasing property “off the plan”, that is, purchasing a property before it is built, has different risks and considerations compared with buying existing property. There are problematic areas to be aware of which, if not carefully considered, may cause extra costs, time delays and disappointment for purchasers. Avoidable risks can be mitigated if you obtain legal advice from our conveyancing experts before you commit to the contract.
Quality and variations to design
Often the developer will be allowed to make changes to the building plans throughout the construction process. This may mean that the finished property is not exactly as it was described or shown to you when you exchanged contracts.
You may not know exactly how your property will look when construction is finished and sometimes the fixtures and fittings are different from how you may imagine or what was shown to you in a brochure or demonstration display.
Completion date
The completion date for the contract will not likely be the standard 6th week after exchange. Usually, you have to wait until the building is finished and all plans for the property are registered at the land titles office. Be prepared to pay your deposit on the date of exchange and consider how you will arrange your finance for the balance once the property is completed. You should also consider how and when you must pay your stamp duty (hyperlink to “stamp duty”) and whether you are eligible for a grant.
Delays
Delays in construction, for example, due to adverse weather conditions or planning approvals, are not uncommon and may delay when the property, and hence your purchase, is completed.
If you are relying on the sale of your current property to fund the balance of the purchase price, you may need to arrange interim accommodation if you sell too early.