Off The Plan

‘Off The Plan’ transactions involve arrangements to buy or sell property that has not yet been registered as a single lot with the relevant land titles registry. The transaction may involve the purchase of vacant land forming part of a subdivision or a ‘house and land package’ for the construction of a new house or unit to be built on that land. At the time of entering these arrangements, the subject of the sale is not necessarily tangible, but depicted through the developer’s marketing activities, display homes, models, artists impressions, concept plans, etc.

Buying a property Off The Plan

Off The Plan contracts are more complex than the standard form contracts used when selling existing residential property. The contract is usually prepared by the developer’s lawyers with provisions tailored to the specific developer and development in question. It is essential to have a contract for your proposed Off The Plan purchase reviewed and explained to you by an experienced property lawyer.

Andrew has over 35 years’ experience in Off The Plan contracts and is known to be one of Brisbane’s leading Off The Plan solicitors.

As a building project requires a level of flexibility to allow for contingencies throughout construction and the registration process, an Off The Plan contract will not usually have a definite completion date. Most will include a ‘sunset clause’, which is the ultimate time within which the contract must be completed, for example 24 months from the date of signing the contract. If the sunset date passes without completion having been affected, the parties may have certain termination rights.

Once construction is completed and complies with all development requirements the plan can be registered and title to the new property issued. This triggers the actual settlement date, which is generally a few weeks later.

To deal with the uncertainty in timelines, purchasers buying Off The Plan should have a contingency plan. They will also need to carefully monitor their financial circumstances – with most loan approvals only lasting a few months, they will need to ensure that their lender is kept informed of progress and finance will still be available when it is time to complete the transaction.

It is also typical for Off The Plan contracts to include allowances for variations to the land dimensions. For example, contracts often provide for a discrepancy in the size of the land between that shown in the contract and what the buyer will ultimately own on completion. This takes into account any directions given by the consent authorities who have the ‘final say’ regarding approval of the development. Any reductions in land should be capped in the contract.

Other variations may relate to the provision of ‘equivalent’ fixtures and fittings.

Disclosure plans and disclosure statements

When offering Off The Plan properties, sellers must provide buyers with a disclosure plan and disclosure statement. The disclosure statement is a representation of what the buyer can expect on completion.

Disclosure should provide a clear description of the subject matter of the sale, whether it be vacant land, a free-standing dwelling, or unit in a community title complex. The plan should indicate the proposed lot number, size and orientation of the land and be ‘substantially’ complete. The disclosure statement must detail the type of works contemplated, a description of the proposed dwelling including the type and quality of materials, finishes and inclusions.

During the construction phase the developer or seller’s agent should communicate with the buyer regarding progress. Any proposed change to the initial plan must be provided in writing to the buyer by way of a further disclosure statement. A significant or material change between the original and subsequent disclosure that is likely to adversely affect the buyer may allow the buyer to terminate the contract.

As with any decision involving a large financial commitment, there are pitfalls and processes to navigate with an Off The Plan property transaction and many factors to consider before entering a contract. Our property lawyers can provide expert advice and guidance.

If you need assistance, email [email protected] or call 07 3855 8880 for a no-obligation discussion and for expert legal advice.