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Buying Off the Plan

Your Essential Queensland Guide
Buying Off the Plan
 

What is Buying Off the Plan?

Buying off the plan means purchasing a property that hasn't been built yet. You're committing to a property based on designs, renders and developer plans, with construction timeframes typically ranging from 12-48 months. You'll pay a deposit when signing the contract, but the final payment isn't due until settlement after construction is complete. 

Key Benefits:

  • Potential Capital Growth: You lock in today's price but don't complete the purchase until construction finishes, potentially benefiting from market growth during this period.
  • First Home Buyer Eligibility: Off the plan purchases are often eligible for first-home buyer schemes in Queensland.
  • Input on Design: You may have opportunities to select fixtures, finishes, layouts and other design elements.
  • More Time to Save: The period between deposit and settlement gives you extra time to build your savings.

 

Important Risks to Consider

  • Market Fluctuations: Property values might decrease between signing the contract and settlement.
  • Construction Delays: Building projects frequently experience delays due to weather, material shortages or construction challenges.
  • Developer Issues: Projects might be cancelled if the developer doesn't secure enough pre-sales or obtain finance approval.
  • Uncertainty of Final Product: The completed property might differ from what you envisioned based on plans and renders.
  • Contract Termination: Some contracts include clauses allowing developers to cancel under certain conditions.

 

Legal Considerations

Disclosure Statement

The seller must provide a disclosure statement that:
  • Contains their name and address
  • Identifies you as the buyer
  • Clearly identifies the property
  • Includes details about the proposed state of the lot
  • Contains information from a cadastral surveyor about planned works

You must sign and date this statement to confirm you understand it. This document is crucial for making an informed decision about your purchase.

Contract Terms

A contract becomes binding once both parties have signed. Understanding these key terms is essential:
  • Sunset Clause: Sets the latest date for settlement, after which you may terminate the agreement. Recent Queensland law changes provide buyers with more protection against unfair uses of sunset clauses.
  • Defects Liability Period: Typically 3 months in Queensland, during which the developer must fix reported defects.
  • Cooling-Off Period: For off the plan purchases in Queensland, this is 5 business days. 
Ending a Contract

As a buyer, you can end a contract if:
  • There's a change to the initial disclosure that will cause you significant disadvantage (material prejudice)
  • For land sales (excluding apartments in community titles schemes), if the seller fails to settle within 18 months after contract signing (unless you've defaulted)

Note that larger developments like apartments and townhouses typically have longer construction timeframes and different sunset clause provisions to account for this. This is why it's essential to carefully review sunset clauses in your specific contract.
Recent property law reforms (November 2023) limit when developers can use sunset clauses to terminate contracts for the sale of land. For specific advice on how these reforms affect your situation, consult with us at Cozee.

 

Protecting Yourself

  • Research the Developer: Investigate their track record and reputation with completed projects.
  • Analyse the Development: Review plans, specifications, building materials, layouts and amenities.
  • Location Research: Understand the area's demographics, development plans and potential impacts.
  • Seek Legal Advice: Engage Cozee Conveyancing's Queensland legal professionals who are experienced in off the plan purchases to review contracts.
  • Understand Financial Terms: Be clear about the deposit amount, payment schedule and potential interest charges.
  • Pre-Settlement Inspection: When construction completes and it's time to settle, conduct a thorough pre-settlement inspection with your contract in hand to ensure everything matches what was promised and all included items are present.

For expert guidance through your off the plan purchase journey, contact us at Cozee. Our team of professionals will help protect your interests and provide specialist legal advice throughout the entire buying process

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