Things to Consider before buying an Off-the-plan Property
There are a number of issues which an individual looking to purchase an off the plan property must be aware of. One of the issues involved with purchasing a property off the plan is that the contracts are usually lengthy and can be extremely complicated. This is the reason why individuals should seek legal advice if they do not understand any terms in an off the plan property contract.
Recently, a number of off the plan purchaser’s of apartments were forced out of their contracts at the discretion of the property developers. The purchasers were unaware of a clause in the contract that allowed the vendors or purchasers to essentially opt out of the contract if the completion date was not met. This type of clause is commonly referred to as a ‘sunset clause’. The ‘sunset clause’ has been used by developers in the past to take advantage of increasing property prices by making off the plan contracts void in order to resell the properties for a higher price.
The above example highlights the importance of purchasers having a full understanding of what is contained in the off the plan purchase contract. Some examples of things that you should check before purchasing an off the contract plan include:
- Is there a ‘sunset clause’ in the contract?
- Is there a reasonable amount of time to complete the contract?
- Do you have a ‘opt out’ clause in the contract?
- Is there a clause in the contract which requires the developer to do everything in their power to complete the development in the required time period?
- Is the contract subject to any preconditions which may affect the ability of the development to commence?
- What happens to your deposit if the development is not completed on time?
If you need any legal advice from a lawyer in regards to your off the plan contract, the team of Lawyers at The Quinn Group can help. Contact us on 02 9223 9166 or fill out an online enquiry.