Off the Plan Purchaser's Checklist for NSW

Purchasing a property is indeed a significant milestone and a major financial commitment. Hence, it is important to consider all the aspects of the property carefully before making your decision. To navigate this process confidently, equip yourself with this helpful off the plan purchaser’s checklist for NSW.

One popular way to buy property in NSW is off the plan. An off-the-plan property is one that is bought before it is built, often even before construction has started. Such property includes vacant land to be subdivided or strata property still under construction.

When eligible, buying off the plan can give you benefits like deferral of transfer duty and the First Homeowner Grant. However, it also carries unique challenges and risks, including construction delays and variations from the planned design. Hence, both buyers and sellers must seek legal advice to ensure a smooth and successful off-the-plan conveyancing process.

What is Off-the-Plan Conveyancing?

This refers to the legal process involved in purchasing a property that has not yet been built or is still under construction. Hence, you are buying the property based solely on information provided by the developer or builder. Moreover, this includes the disclosure requirements outlined in Part 2 of the Conveyancing (Sale of Land) Regulation 2022.

Unlike traditional conveyancing, where the property already exists, off-the-plan conveyancing requires careful attention to details that may change by the time the property is completed. Remember, buying any property is not only about having a home but also a long-term investment for your financial future.

Off the Plan Purchaser’s Checklist for NSW

Off the plan conveyancing can be more complex than traditional conveyancing due to the unpredictable nature of construction projects. Thus, to help you, here is our off the plan purchaser’s checklist for NSW, which includes crucial factors to consider:

1. Do Your Research

Foremost, thorough research is the foundation of a successful off-the-plan property purchase in NSW. Begin with gaining a deep understanding of the property market in the desired area. Also, look into recent sales data, market trends, and future development plans that could influence property values.

Additionally, consider the specific attributes of the property and its location. Moreover, investigate the developer’s and builder’s reputation through examining their portfolio, seeking feedback, and checking for any legal issues filed against them. Conducting a comprehensive research, helps you make a well-informed decision, anticipate potential risks, and significantly position yourself for a successful investment.

2. Carefully Review Contract

Reviewing the off-the-plan contract meticulously is a critical step when purchasing off the plan in NSW. Moreover, it is recommended to engage with a qualified conveyancer or solicitor to assist you in examining the contract. Thus, ensuring that you fully understand all the terms and conditions, as these contracts are often complex and detailed.

In addition, focus on key elements, such as the cooling-off period. It provides a window for you to withdraw from the contract if you change your mind. It is also a good idea to pay close attention to the sunset clause (and any extension to such sunset clause). Such clauses set the deadline for the project’s completion.

Moreover, clarify what is generally included in the purchase price and review the dispute resolution procedures. Doing so enables you to know how any further issues will be addressed. Thus, providing you with a clear path to resolve conflicts that may arise.

3. Understand Protections Available

Another part of off the plan purchaser’s checklist for NSW is further understanding the protections available to you. Key protections may include:

Having increased disclosure which requires developers to furnish buyers with a comprehensive set of critical details. This includes detailed plans, building specifications, and financial information. Access to this information also allows buyers to make well-informed decisions before committing to the property transaction.
The presence of a cooling-off period of 10 business days. During such time, buyers can reconsider their purchase and back out of the contract. It also provides an additional layer of security for buyers in case they have second thoughts or encounter any unexpected hurdles before the property is completed.
Another protection is the notification of changes. This means that vendors must inform buyers of any alterations to the original plans or specifications of the property. Such is indeed important as it also allows buyers to assess whether the changes are acceptable or if they would prefer to withdraw from the purchase.
For contracts entered into from 1 December 2019, purchasers may have the option to rescind the contract if there is a change to a ‘material particular’. However, this option is only available if the purchasers can demonstrate that they would not have agreed to the contract if they had known about the change and that it significantly affected them. Alternatively, purchasers can also choose to stay in the contract and seek compensation of up to 2% of the purchase price for the change. Moreover, if there is a dispute regarding the compensation claim, it can be settled through arbitration if the parties cannot reach an agreement.
Since developers are required to obtain a buyer’s consent before terminating a contract, another protection for potential buyers is using a sunset clause. Failure to do so would necessitate the developer to seek approval from the NSW Supreme Court to justify termination.
Developers must also give buyers a copy of the final plan and related documents at least 21 days before settlement. Hence, buyers cannot be forced to settle within that period. If the plan and related documents reveal a significant error that the developer did not inform about, buyers have the right to cancel the contract or seek compensation within 14 days of receiving the documents.
Lastly, is through deposits. After 1 December 2019, any deposit money and instalments paid must be kept in a trust or controlled money account of the stakeholder, typically the real estate agent, until the settlement. This measure safeguards the buyer’s funds in the event of the developer’s bankruptcy.

Knowing these protections will enable buyers to address any problems that arise during construction or after settlement. Thus, ensuring legal recourse if the property does not meet the agreed standards or if there are significant delays.

4. Make an Offer

When making an offer, preparation and strategic negotiation are also key. Start with negotiating the terms of the contract to better suit your needs. Moreover, this might include adjustments to the deposit amount, settlement terms, and any specific inclusions or upgrades. Once the terms are agreed upon, ensure that the offer is documented in writing, clearly outlining all conditions to avoid misunderstandings.

In addition, having a pre-approval of your finance for such purchase can significantly bolster your negotiating position. Hence, demonstrating to the developer that you are financially ready to proceed. Being well-prepared and demonstrating financial readiness also enhances your bargaining power and increases the likelihood of the offer being accepted.

Engage with Reliable Conveyancer or Solicitor

Make your off-the-plan purchase a success by equipping yourself with this off-the-plan purchaser’s checklist for NSW. Moreover, consider engaging a reliable econveyancer or property law solicitor to protect your interests throughout the process.

VC Lawyers is here to help you navigate the complexities of property law and conveyancing. Our team of experienced econveyancers can guide you through each step of the off-the-plan property purchasing process. Moreover, our property law solicitors are always ready to answer your queries about buying off the plan in NSW. Thus, ensuring that all legal aspects are covered, and your rights are protected. By working with VC Lawyers, you can have peace of mind knowing that you have practical legal support on your side.

With VC Lawyers, guarantee that your off-the-plan property purchase will be a seamless experience.

NB: This blog post is neither a legal advice nor intended to be such, and is only for general information. The same should not also be taken as a financial or commercial advice. The reader must personally consult their professional adviser/s on the contents of this blog post. VC Lawyers is not liable for any loss or damage, direct or consequential, as a result of the reader’s or a third person’s misconstruction of the wordings or use/misuse of the contents of this blog post.