Buying off-the-plan is a reality for many people looking to purchase units or apartments. This basically means that you are buying a unit or apartment in a building that hasn’t yet been constructed.
As only a small deposit is required until completion of the building, it can be a good way to save money. There is also the possibility that you might be able to make money if the value of the property increases in the time it takes for constructions. But it should be noted that the property market is speculative, and nothing is guaranteed.
Here are some of our tips for buying off-the-plan:
- Material changes to off-theplan contracts can give you a right to termination in certain circumstances. So it’s a really good idea that you keep all the advertising materials, brochures, plans etc so you know what you are buying, and can prove material changes with ease.
- In keeping with this, make sure you check all the details of your proposed purchase as while the artists pictures provided to you may look wonderful, it may not be composed of the materials, fittings and sizes.
- Sometimes display homes may be built larger than the actual plan, so it’s a good idea to take a measuring tape with you.
That way, you can see whether the rooms, cupboards and ceilings are built accurately to your plan. - When doing your research, investigate your developer. Have they completed projects like this before? Are they well known? Do they have a good track record? The last thing you want to be doing is signing up for a project that may fail, or be shonky.
- It’s important that the contract provides for a full refund of your money in the event the project goes bust, or the developer doesn’t finish the job.
- It’s a good idea to look at whether there are other proposed developments around the property, as you need to consider whether your view may be blocked, or whether another building could put your apartment into shade.
- Off-the-plan purchases can often take two to three years between the time you sign the contract, and when settlement actually occurs. In the event you withdraw from the contract, it’s a good idea to check what the penalties are.
- You need to read the contract carefully, and look at when the sunset date is. This is the by which date the builder is required to have completed the project. It’s a good idea to make sure that the contract satisfactorily provides for the instance where the building hasn’t been finalised by the sunset date.
- When looking at any unit or apartment, it’s a good idea to carefully read the by-laws as they often place many restrictions, such as no pets. You also need to have a look what the strata levies will be, and whether these may be increased in the future.
If you’re looking to buy off-theplan, we have solicitors specialising in this area that can assist you.
