Buying property off the plan has often been seen as a way to
invest in future development at today's prices. The State
Government is encouraging development around areas where there is
transport infrastructure in place, such as railway stations.
A recent change to Sutherland Shire Council's Local
Environment Plan (LEP) is one example and it will lead to buying
Property off the Plan being more common practice in Sutherland
Shire in the near future. The Sutherland Shire Mayor stated
"Sutherland Shire is set to have approximately 10,000 new
properties in the next 5 years mainly round Engadine, Caringbah and
Miranda close to transport".
WHY YOU SHOULD EXERCISE CAUTION...
There are always risks in buying property off the plan, as you
often cannot "see" what you are buying and how it relates
to other properties around it. When you buy off the plan, you are
paying for a property where the end product may not only differ
from your expectations, but be worth less than what you originally
paid by the time it is finished. Property prices not only go up but
also go down.
If you are thinking of entering into a contract to buy premises
not yet built, you must exercise caution and gain appropriate legal
and other advice before signing any documents or paying any money
as there are risks in buying Property "Off the Plan".
WHAT YOU SHOULD CONSIDER...
All off the plan contracts differ depending on the developer,
there is not a standard contract. As a purchaser you need to ensure
you are getting the appropriate advice on the contract so that you
will be happy with the end product. There are a number of things to
Changes to Plans, the developer may vary the design of the
property and properties around it without the buyer's
Changes to layout.
Settlement (when you or your tenant can move into the property)
may be delayed substantially due to weather or council
Quality of finish, you need to ensure you are happy with the
schedule of finishes attached to the contract (items such as oven,
dishwasher, carpet/ tiles etc.)
Funds to complete the purchase, you need to ensure you will you
have the funds required to settle the purchase. eg. If settlement
is in 2 years time are you going to be in the same financial
Does the contract allow you to on-sell to another purchaser
prior to settlement.
These are but a few of the many things you need to consider with
off the plan purchases or sales.
At Watkins Tapsell our Conveyancing team has considerable
experience in acting for both developers drafting sale contracts as
well as acting for purchaser's buying properties off the
We ensure that the contract protects the interests of the
parties so that the whole process runs as smoothly as possible.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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The High Court of Australia has granted special leave to appeal a decision of the NSWCA that upheld an adjudication determination under the NSW 1999.
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