October 2019
Buying a property ‘off the plan’ is always risky because you can’t physically inspect the property before you buy. New laws to start on 1 December will hopefully go a long way to fixing many problems that have arisen in the past. Traditionally you were shown a set of plans or drawings prepared for the proposed building works and expected to commit your money based on that. Developers and agents were guilty of trying to sell the dream with glossy brochures that in reality weren’t what buyers were getting in the end. Often Contracts only had basic sketches and brief details in the actual Contract leaving many wondering why it all went wrong. The most important thing with such purchases is ensuring that what you think you are buying is what you get once it is built. The new laws include requirements for properly prepared plans drawn by registered surveyors being included, together with details of any restrictions, easements or covenants affecting the property necessarily included. Strata properties will need draft location and floor plans, draft by-laws and management statements. From 1 December there will need to be a Disclosure Statement provided with the Contract showing lot sizes, numbers and descriptions and schedules of finishes as well as Sunset Dates and conditional events if included. If the documents aren’t included buyers will have an option to rescind the Contract. With any proposed building works there can be many changes necessary to match the paper drawings to the construction works necessary and there can be changing development laws with councils requiring compliance changes to already existing plans. The new Rules require notification of any changes, with an option to rescind if the changes are significant or the option to claim compensation of up to 2% of the purchase price if you agree to go ahead with the changes. A Ten (10) business day cooling off period will apply for all off the plan Contracts. With the boom real estate market there was a large growth in the ‘off the plan’ sales of strata units which resulted in many problems in the past, new laws prohibit the release of deposits to developers as a way of stopping a lot of issues. The current Contract for Sale of Land is being updated to deal with all the changes. If you are planning to buy off the plan give us a call at Johnston Tobin Solicitors to make sure you are properly looked after and get what you are paying for and we can help you with all of your conveyancing.
