“Off the Plan” Purchase

With many new developments being built in order to satisfy the demand for residential properties, Off the Plan purchase is becoming a popular method of purchasing by securing an apartment or a retirement village home that is not yet completely built. Along with the benefits of this type of purchase there are some associated disadvantages. At Open Door Legal we aim to make the purchase of such property as painless as possible. Here are some pointers which you may wish to consider.

Advantages:

1. You may be eligible for a Government Grant or an exemption for newly built properties;
2. You lock in the purchase price, which may grow in value by the date the property is
   completed; and
3. You ordinarily are able to secure the property by paying the required deposit (between 5 to 10%), with the balance paid once the property is completed.

Disadvantages:

1. As the builder maintains the right to alter the property, you may not end up with a property which is exactly as you expected (it may be bigger, smaller, generally different to what you thought it would be);
2. Time delays may prevent on time property completion; and
3. Your tastes may change over time and you may end up with a property which you may not like once the property is competed.

If you are contemplating the purchase of property perhaps you should consider the following:

• Do some research as to who the builder/developer is and the reputation they may have.
• If you are not very good with reading design plans, perhaps get a second opinion. Quite often what you believe to be the study may simply be just the storage space. Make sure that you check the dimensions of the property, including the ceiling height, balconies, parking, storage, extra facilities and amenities such as BBQ and pool space usage, connections such as gas/electricity/TV and internet, materials used for fixtures and fitting in the property.
• Ask the developer as to how much change can be expected form the plans which you have before you.
• Are you happy with the location of the property? Is it near a train station? Will it be likely that further developments will affect your property once it is completed? If it is in a development zone it may be prudent to realise that further construction may occur once you potentially move into the newly finished property.
• Do the plans have council approval?
• What are the proposed strata levies? Are there any strata management arrangements for the maintenance of the property? You will need to consider this as these fees will be paid on top of any possible monthly loan repayments you may already be liable for once the property is finished.
• Look at the Sunset Clause (or the Sunset Date), this is the designated time that the builder/developer has to complete the building project. Are there any guidelines as to what will happen if extra time is required to complete the works?

Once you are satisfied with the off the plan property we can tailor make a solution for you making it a breeze in owning the property.