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Buying off-the-plan with confidence

Author: As Western Australia’s population continues to grow, many developers are taking the opportunity to clear land and begin building apartments and townhouses using the off-the-plan sales method.

Off-the-plan sales refer to property purchases that take place prior to the Certificate of Title being issued. It means buying on trust, albeit with a legal contract in place.

How does buying off-the-plan affect settlement?
This type of sale can have its advantages, but it’s important to read the fine print so you know exactly what you’re buying and what your rights and responsibilities are.

If you’re buying off-the-plan you need to be very certain of when the settlement period is and the consequences of not meeting it.

Failing to meet settlement under some circumstances gives the seller the right to cancel the contract with you and re-list the property at a higher listing price. This might seem unlikely, but delays in settlement are often beyond your control.

Even if you have paid stamp duty on the land, had the contract stamped and sold another property ready to move into your dream home, it might come unstuck at an overdue settlement which isn’t directly your fault.

At this point the sellers and developers could cancel the contract and re-list the property for sale.

Enquire about sunset clauses
For anyone thinking of buying land or an apartment from an off-the-plan development, it’s wise to enquire about any sunset clauses in the contract.

Does it contain any circumstances that could give rise to the seller’s contractual right to withdraw and terminate the contract and if so what are they?

Put simply, are there any special conditions you should know about before signing?

Off-the–plan sales can be a great opportunity to help people buy into an exclusive block or subdivision, especially if it looks like it’s going to be popular. Even so, it is essential to read the contract thoroughly so you’re aware of where you stand.

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