Off-The-Plan Contracts
Standard Sale Contracts
OFF THE PLAN CONTRACTS
Sunset Date
Usually the property being sold under an off-the-plan contract is, in the case of:
- A unit or house yet to be constructed or is in the process of being constructed; or
- land, is yet to be subdivided.
The vendor/developer will elect a date (known as a’ sunset date’) by which the property is to be constructed or land to be subdivided and the plan registered with the land titles office.
If the sunset date is reached and the property is not completed or the plan registered with the land titles office, usually:
- the purchaser may end (‘rescind’) the contract by giving written notice to the vendor/developer and the deposit will be refunded to the purchaser;
- the vendor/developer may also end (‘rescind’) the contract but must comply with strict conditions. See Sunset Clauses (NSW)
In most cases the contract will include an allowance for the vendor/developer to extend the sunset date because of inclement weather, industrial disputes, approval delays etc.
You should ensure the sunset date is appropriate to the development to be built and to your purchase or investment strategy.
Variations to Plan
The off-the-plan contract will include a copy of the plan of the property e.g. a strata plan for units or a subdivision plan for land, showing the dimensions of the property being sold.
Usually, the vendor/developer will allow a margin by which the area of the property including balconies, car spaces and storage areas may be reduced without objection from the purchaser e.g. usually between 3-5%.
You should ensure that any reduction in the area of your property does not adversely affect your future use of the property.
Variations to Layout
The off-the-plan contract for a unit or house should include a layout plan showing the dimensions and layout of the rooms, balconies etc.
In some cases, the vendor/developer will allow a right to vary the layout plans.
You should ensure that any variation to the layout of the property does not adversely affect your future use of the property.
Finishes
The off-the-plan contract for a unit or house should include a schedule of finishes detailing the finishes and inclusions to be provided with the property e.g. paint colour, tiles, carpets, power points, stove, oven etc.
The vendor/developer will usually allow a right to vary the finishes to a similar type and quality. This is to be expected as some developments are planned years ahead and the type of inclusion selected may have been replaced or superseded by the time the development is completed.
You should ensure that any change in the schedule of finishes is to a similar type and quality as offered in the contract.
STANDARD SALE CONTACTS
Completion Date
Will the contract be completed within the standard 42 days or an earlier or later date;
Inclusions
What is included in the sale e.g. light fittings, fixed floor coverings etc.;
Exclusions
What is excluded from the sale e.g. chandelier, garden shed;
Deposit
Will the deposit to be paid be 10% of the price or a lesser amount;
Late completion interest
Will the purchaser pay interest if the purchaser does not complete on time;
Adjustment of outgoings
e.g. will the purchaser be required to pay a proportion of the vendor’s land tax;
Vacant possession -v- subject to tenancy
Will the purchaser accept the property as tenanted on completion?
