Off-plan pros and cons

Weekend Argus (Saturday Edition) - - PROPERTY -

BUY­ING prop­erty “off plan” holds many ben­e­fits for buy­ers without large sums of cash for trans­fer du­ties and other hid­den costs, but there are some po­ten­tial pit­falls.

Martin Schultheiss, chief ex­ec­u­tive of the Har­courts Africa prop­erty group, says one of the most at­trac­tive fea­tures of off-plan pur­chases is that VAT is built into the sales price.

“Other ben­e­fits in­clude mov­ing into a new home in a planned com­mu­nity, which more of­ten than not of­fers ex­cel­lent se­cu­rity mea­sures. On top of that, buy­ers are of­ten able to cus­tomise the lay­out or fin­ishes of their new homes to suit their own pref­er­ences.

“How­ever, buy­ing off plan does present some chal­lenges, in­clud­ing the fact that buy­ers usu­ally have to base their de­ci­sions on build­ing plans and ar­chi­tects’ draw­ings…”

In ad­di­tion, Schultheiss says, not many buy­ers re­alise that off-plan pur­chases may in­volve two con­tracts.

“Buy­ers ac­tu­ally need to sign two sales agree­ments – one for the pur­chase of the land and the sec­ond specif­i­cally for the pur­chase of the home to be built. The lack of a writ­ten con­tract for the build­ing can cause con­fu­sion and could quite eas­ily lead to lengthy dis­putes be­tween buyer and de­vel­oper.”

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