An off-the plan contract is a contract for the sale of land or a strata title unit or townhouse that has not been issued with a separate title on the date that the contract is entered into.
There are serious pitfalls to be aware of when purchasing off-the-plan. These include complying with the strict disclosure requirements under legislation including the Land Sales Act 1984 (Qld) and the Body Corporate and Community Management Act 1997 (Qld) ("the Act"). Failure to comply with these requirements as a seller will mean that the buyer may have a right to terminate the contract.
For example, a prominent Queensland court decision (dated 19 August 2005) highlighted the risks of selling off-the-plan without due care to detail. The decision of Justice White pointed out the risks under the disclosure regime for off-the-plan sales in Queensland. The court allowed the contract to be terminated on the basis that requirements for the Form 14 Information Sheet under the Act had not been met, and the buyer was materially prejudiced by the fact that the original disclosure statement did not make known that buyers had to purchase a furniture package to participate in the letting pool. The result was extra costs and time delays for the developer and a disappointing ordeal for the buyer. These types of oversights can be avoided.
The other disadvantage for a buyer (particularly of a unit or townhouse) is buying the property unseen. Matters such as the payment of a deposit, negotiating a schedule of finishes, checking provisions, examining the sunset clause, dealing with insurance and checking arrangements for pre-purchase inspections require an experienced eye.
Of course, there are also advantages to buying off-the-plan. From a seller's perspective, the seller can secure pre-sales, which may be a pre-requisite of a seller's bank. From a buyer's perspective, the buyer may be able to secure a new property and possibly enjoy a "profit" in a rising market.
Quinn & Scattini Lawyers provides guidance for buyers and developers, ensuring a seamless process and a win-win outcome for all involved. We handle contract preparation, disclosures, and community title schemes with professional care and attention to detail, taking the worry out of off-the plan transactions and avoiding unnecessary court proceedings.
Avoid problems, consult our experienced Property Law Team in the first instance before the difficulties arise!
Off-the-Plan Contracts Team
Duncan Murdoch - Director