FAQs for buying a property off the plan

Buying a property off the plan can be daunting.  The frequently asked questions below may assist to answer some questions you may have.

What is the cooling off period?

The cooling off period commences on the day that the buyer or their solicitor receives a copy of the fully signed contract, and expires….. During this cooling off period, a buyer may terminate the contract without any reason.  It’s a consumer protection so if you merely change your mind, you are not bound to the contract. Beware though that a seller has a right to charge you

What is the sunset date?

The sunset date is the date in which a buyer has a right to terminate a contract if the development has not completed and the property contract settled within this timeframe.  So if for any reasons the development is not completed, you are able to get out of the contract from this date.  The sunset date is normally 3 ½ years from the date you enter into the contract, although this timeframe can be extended to 5 ½ years.

When will settlement occur?

It is standard for settlement to be 14 days after registration of the plan.  Once the development is completed and the developer has obtained all the necessary certifications and approvals, the plans will go to the Council and then to the Titles Office.  Once the Titles Office registers the new plan it will send notification to the developer who will then call for settlement.

Can the contract be subject to finance?

This is at the discretion of the seller.  However, until the property is completely the bank cannot carry out a valuation and therefore you can only obtain conditional pre-approval.  The pre-approval will normally expire within about six months, so it’s probable that you will have to start the finance approval again closer to the completion of the development.

What if the development or the property changes?

Prior to signing the contract you will be provided with disclosure documents.  These documents will provide for the current intention of the property.  It is likely that the development of even the unit you are buying may change.  This could be due to a myriad of reasons including requirements from the Council or other authorities.  If the development changes, the developer will provide a ‘further statement’ which will detail the changes.  You will have 21 days to review this and if you feel these changes material prejudice you, then you may have a right to terminate the contract.

Icon Legal can assist you with more information or an in-depth advice on your proposed purchase.