Buying off-the-plan or selling off-the-plan property

Off-the-plan transactions involve buying or selling a partially built property or a property that is expected to be built in the future (basically ‘off the plan’). Off-the-plan properties include house and land packages, townhouse developments, new subdivided lots, and apartments. When you buy an off-the-plan property, you are sometimes eligible for off-the-plan duty concessions.

Generally, buying or selling off-the-plan is a similar process to buying or selling an established property. You draw up a contract of sale, negotiate any terms and conditions, sign the contract, and settle. What you just need to remember is that off-the-plan transactions generally involve a period of time you will need to wait out when you sign the contract and when the plan of subdivision is registered and/or occupancy permit being provided.

These are a few of the things you need to consider when buying off-the-plan.

When you sign an off-the-plan contract, you are buying a property that has yet to be constructed or is still under construction. You are effectively buying something that the developer/vendor has ‘envisioned’ will happen or expects to occur. You’re usually buying the property based on the proposed plan of subdivision (which has yet to be endorsed), which is basically a document drawn up by a surveyor that provides details of new parcels of land and how the building is going to be built. The plan may also create easements, owners corporation, and restrictions.

As mentioned earlier, an owners corporation is usually created upon registration of a plan of subdivision if there is common property (i.e. property that is strictly not entirely yours, but you have the right to use). Examples of this are driveways, gardens, swimming pools, gyms, and other facilities in the complex that you use. The owners corporation is in charge of managing the common property of the property. There is usually a charge for owners corporate fees for teh services and facilities they manage. This is usually specified in an owners corporation certificate.

Usually, an off-the-plan contract of sale includes a ‘sunset clause’. This specifies the time by which the plan of subdivision must be registered. Failure to comply with the sunset date may mean either buyer or seller can end the contract of sale. The developers require will usually require the buyer’s written consent before they can terminate the contract pursuant to the sunset clause.

Drawings are generally included in the contract when buying property off-the-plan. These complex drawings may at first be confusing but they should give you a holistic view of how the property will look once constructed. Just be aware that the developer may be able to make changes to the plans depending on what is approved.

Often, fit-out are also provided in the contract of sale detailing the installation of floors, type of flooring, furnishings, etc. Sometimes, you are able to pick and choose the fit-outs of your off-the-plan property.

Generally, off-the-plan properties are limited to a deposit of 10%. It’s also often that off-the-plan property are called for settlement very soon after registration of the plan and occupancy permit. Therefore, you should have your finances ready! You should also keep in touch with the agent and your solicitors regularly to see when the anticipated time for settlement is. If the buyer cannot settle, the seller may be able to terminate the off-the-plan contract and retain the deposit money (amongst other rights the vendor has.

Take advantage of our highly personalised services and cost-effective conveyancing fees. If you need assistance when buying off-the-plan or selling off-the-plan in Victoria, get in touch with our conveyancers by calling +613 9959 9850 or email us at info@tnsconveyancing.com.au.

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If you decide to proceed with us, we will contact you straight away. We will ask for some money in trust and moving forward, our conveyancing team will keep in touch via email and phone throughout the process.

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