Conveyancing & Property Law

7 Hot Tips for Buying

Property Off the Plan

May, 2017

Legal Disclaimer

This presentation is offered for general information

purposes only. It does not constitute specific legal

advice or opinion. You should not act or rely upon any

of the information contained within this seminar

without seeking the advice of a qualified solicitor who

specialises in the particular area of expertise and

jurisdiction that you require.

1. Lock in the right price by doing

market research

When you buy property 'off

the plan' you are

purchasing it many

months, sometimes years,

in advance before

construction has been

completed sometimes even

before construction has

started.

1. Lock in the right price by doing

market research

For this reason, it is important to lock in a set price

that is based on the current market price, instead

of an unknown future price, which could be much

higher.

1. Lock in the right price by doing

market research

Therefore, before you agree on a price, you should

always do your own research (or seek advice from

a qualified professional) to ensure the price offered

reflects the current market price for similar

properties in the area, including the average rental

prices.

1. Lock in the right price by doing

market research

Of course, there is always a chance that the

property market will fall, which might mean you

end up paying too much for the property and you

may therefore find it more difficult to secure

finance for it leading up to settlement time.

This is why it is preferable to buy 'off the plan'

only in areas that have shown consistent and

steady market growth over the last ten or so years.

2. Double check the variance clause

When you buy property 'off the plan' you are

making a decision based on what you've seen in

brochures and other marketing materials

Unfortunately, the measurements (room

dimensions and total area) mentioned in these

materials don't always match up with the finished

product.

2. Double check the variance clause

A 'variance clause'

in your contract will

detail how much

variance is going to

be acceptable when it

comes to the

difference between

what was advertised

and the finished

product.

2. Double check the variance clause

The "acceptable variance" is different in each

contract, which is why it's important to seek the

advice of a good conveyancing lawyer to ensure

that the "acceptable variance" is not too much.

3. Ask for ‘Proof of Progress’

When you buy property 'off the plan' it is important

to ensure the developer is ticking all the right

boxes by asking the developer for proof of

progress.

This simply means asking the developer to provide

you with an update on the project, including what

approvals have already been obtained and what

still needs to be approved

3. Ask for ‘Proof of Progress’

This information should correlate to the project

timeframe that you have been provided, so you

can be assured the project will be completed on

time. Every developer should have this information

on hand, ready to give you.

If you are not sure what to ask for, seek the advice

of a good conveyancing lawyer to handle it on your

behalf.

4. Do background checks

When you buy property 'off the plan' it's always

a good idea to do a background check on the

developer and/or builder before you agree to

purchase.

4. Do background checks

This includes looking at their project history and

asking around to get a sense of their reputation

within the industry.

An easy way to do this is to ask them for a list of

previously completed successful projects, so you

can go and look yourself.

5. Don’t be afraid to ask for samples

When you buy property

'off the plan' it's

acceptable for you to ask

to see samples of the

fittings and finishes, and

details of the proposed

kitchen appliances

(including model

numbers), which the

developer plans to use for

the finished property.

5. Don’t be afraid to ask for samples

You need to check the quality and type of these

so you can be confident that you are getting

exactly what you expect, and not cheap

substitutes.

Every developer should have these samples on

hand, ready to show you.

6. Analyse the floor plan carefully

When you buy property 'off the plan' it is vital

you carefully analyse the proposed floor plan.

This includes not only the floor plan of the

property you are purchasing, but the plans for

the entire complex.

6. Analyse the floor plan carefully

If it isn't a stand-alone property, you need to

consider:

The distance between your property and

others

The size and location of areas, such as car

parking spaces and storage areas

The size and location of access areas,

including entry doors, elevators and staircases

6. Analyse the floor plan carefully

Analysing the floor plan carefully is an important

step.

If you are quoted a "Total Square Metres" area,

make sure you know what that area relates to.

Does it take all the storage areas, parking

spaces, balconies and gardens into

consideration?

6. Analyse the floor plan carefully

If so, your living space may not be as big as

what you thought!

It's best to focus on individual room sizes and

carefully check the measurements (as discussed

in tip 2), as this is what will have the biggest

impact on your enjoyment of the property and

your ability to resell the property down the track.

6. Analyse the floor plan carefully

It's about choosing a property that makes good

use of its space.

Every floor plan is different, which is why it's

important to seek the advice of a

good conveyancing lawyer who has seen

hundreds of floor plans and knows exactly what

to look for.

7. It all comes down to the Contract

As discussed in tip 1, when you buy property 'off

the plan' you are buying something that doesn't

exist.

So when you finally make the decision to

purchase it, you will receive a Contract to

purchase something that you hope will meet your

expectations, which is always going to be more

risky than purchasing an existing property.

7. It all comes down to the Contract

For this reason, it is even more critical that,

BEFORE you sign the Contract, you have a

good conveyancing lawyer thoroughly review the

Contract on your behalf and advise you about

the Contract's contents.

The Contract should accurately reflect the

developer's representations regarding the

property, in order for it to fulfil your expectations.

7. It all comes down to the Contract

There are many other

significant, and often tricky,

"Special Conditions" and

other considerations in 'off

the plan' Contracts.

So investing in the help and

advice of an experienced

and competent

conveyancing lawyer is a

very wise move!

Turnbull Hill Lawyers – Contact Us

If you have any further questions about buying off

the plan or you'd like to discuss a related matter,

please do not hesitate to contact our

Conveyancing & Property Law Team.

We will endeavour to respond to your enquiry

within 24 hours.