Un­der­stand­ing ‘off-the-plan’

Pilbara News - - Property - Hay­den Groves

New apart­ment com­plexes are pop­ping up all over Perth, which has led to more West Aus­tralians opt­ing to pur­chase an apart­ment off-the-plan be­fore or dur­ing con­struc­tion.

Off-the-plan refers to prop­erty pur­chases that take place be­fore the prop­erty is com­pleted and/or the cer­tifi­cate of ti­tle has been is­sued.

A de­posit is paid by the buyer and set­tle­ment oc­curs when the apart­ment com­plex is com­pleted, which could be sev­eral months or years later.

If you’re con­sid­er­ing mak­ing an off-the-plan pur­chase, it’s very im­por­tant you’re aware of the com­mit­ment and that you read the con­tract to know ex­actly what you’re buy­ing and what your rights and re­spon­si­bil­i­ties are.

How does buy­ing off-the-plan dif­fer to a reg­u­lar prop­erty pur­chase?

It’s quite a dif­fer­ent process to buy­ing an ex­ist­ing house and the con­tracts are of­ten lengthy, com­plex le­gal doc­u­ments.

If the prop­erty is an apart­ment, then you’ll be buy­ing a strata ti­tled lot and the de­vel­oper has prob­a­bly drafted a set of strata by-laws, so make sure you read and un­der­stand these.

Be­fore mak­ing an of­fer, check to see if it can be sub­ject to fi­nance ap­proval. This may not be pos­si­ble be­cause a lender can’t make a lend­ing of­fer that lasts for an ex­tended pe­riod, but it can’t hurt to ask.

If you fail to meet set­tle­ment, the sell­ers may have the right to can­cel your con­tract and re-list the prop­erty for sale.

If the apart­ment re­sells for less than what was agreed in your con­tract, then you may be ex­posed to the pos­si­bil­ity of be­ing sued for any short­fall.

Bear in mind that if the devel­op­ment has not yet started con­struc­tion, there is no guar­an­tee of it start­ing. The de­vel­oper will of­ten need to achieve a sig­nif­i­cant num­ber of pre-sales to pro­ceed.

There­fore, it’s wise to in­quire about any clauses in the con­tract that per­mit the seller to with­draw if their sales tar­gets aren’t met.

Off-the-plan sales can be a great op­por­tu­nity to buy into an ex­clu­sive devel­op­ment in a lo­ca­tion you want to live in.

Plus, it can pro­vide an ex­tended pe­riod of time to plan your tran­si­tion, with am­ple time to sell an ex­ist­ing home.

You may also get the op­por­tu­nity to choose from a range of fin­ishes for tiling, floor cov­er­ings and cab­i­netry.

Make sure you read and un­der­stand the con­tract.

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