Out of all the Conveyancing cycles, off the plan purchase typically spans the longest time. With this in mind, there is more inherent risk and should be carefully planned. We recommend people identify a professional legal firm to guide them on this endeavour. This page is designed to educate readers if they are planning to purchase off the plan and familiarise them with the Conveyancing process.
Advantages off the plan purchase
Disadvantages off the plan purchase
These inherent risks are always present when purchasing off the plan, as mentioned, partnering with a professional legal firm will be your best course of action. In addition to this, people purchasing off the plan can also perform the following to set themselves up for success
To further protect vendors and buyers in this scenario, in 2015 the New South Wales Government passed an update to the Conveyancing Act, the update addressed the situation where some developers may deliberately wait for a sunset clause to be activated, and re-sell the property for a higher purchase price, thus negatively impacting the original buyer (time wasted, Conveyancing fees and potentially unable to enter the market).
People are able to view the Legal protections for off the plan property purchasers on the NSW LRS website here, the main features are:
Should the construction not be completed by the sunset date, the buyer is able to withdraw from the purchase without repercussion. In the event the buyer wishes to wait for the construction to be completed, they must provide written consent to extend the settlement.
Read our article about off the plan purchase property for more detailed information.
In short, a sunset clause is a statement in the contract that allows a buyer to rescind the contract if the construction of the property is not completed by the sunset date.
There may be additional terms allowing the sunset date to be extended, so be sure to review the contract carefully.
This is a variable situation as it depends what is written in the original contract.
In the contract, there are usually conditions which provide the vendor different timeframes for extenuating circumstances. The vendor may also request the buying party to consent to the extension of the settlement.
Should the development take longer than the agreed sunset date, the purchaser can terminate the contract without repercussions.
Yes, first home buyers in NSW can receive a discount.
In terms of concession eligibility towards buying off the plan, there are some complexities that should be considered. According to the First Home Buyers Assistance Scheme, a person must satisfy the following:
“At least 1 eligible purchaser must occupy the home as their principal place of residence for a continuous period of 6 months, commencing within 12 months of completion of the agreement.”
We recommend you liaise with a Conveyancer to ensure the timing of settlement synchronises with your movements and you can move into the property at an appropriate date.
The Contract of Sale should be explicit and state your prospective property (i.e. Apartment 32, Lot 4, 123 Smith St, NSW) and not simply the construction of the entire building.
Copyright 2019 © All rights Reserved. Design by NME.Digital
