Consider this if…
- You have been given an off-the-plan contract and a deadline to sign
- You want to know what the developer can change after you have signed
- Your finance approval will expire long before settlement
- You are worried about what happens if the building is delayed
- You want to know how duty works on an off-the-plan purchase
- You may want to sell or transfer your interest before settlement
How it works
Send us the contract and section 32
Along with the plan of subdivision, the schedule of finishes, and any disclosure material the developer has given you.
As soon as you have them
We read it properly
Sunset date, the developer's rights to vary the plan and the finishes, the deposit and where it is held, settlement mechanics, default provisions, and the owners corporation arrangements for the completed building.
2–3 business days
You get our view, and a list of what to ask for
What the contract actually permits the developer to do, what we would want changed, and a plain assessment of the risks you would be carrying between signing and settlement.
With the review
We put the changes to the developer's solicitor
Developers vary in how much they will move. Some clauses are genuinely negotiable, particularly earlier in a project. It costs nothing to ask.
Before you sign
Then we hold the file until settlement
We monitor registration of the plan, deal with the developer through the build, check the property against what you contracted for, and settle.
Through to settlement
Fee
Quoted in writing before we start
GST inclusive
Excludes: Government charges, searches and settlement costs are separate and charged at cost.
Off-the-plan contracts are longer and take more work than a standard purchase, and we quote them accordingly. The review fee is credited against our conveyancing fee if you proceed.
Turnaround
Our written view back to you within three business days, because these contracts are long and the detail is where the risk sits.
What you are actually signing
An off-the-plan contract is a promise to buy something that does not exist, on terms the developer's solicitor wrote, with settlement possibly years away. The document will be long — several hundred pages is normal — and most of it is plan, schedules and disclosure material.
The parts that decide whether this is a good contract or a bad one occupy a few pages. Everything else is context.
The clauses that matter
The sunset date. The date by which the plan must be registered or the building completed. If it passes, the contract can come to an end. Victoria restricts a vendor's ability to end a residential off-the-plan contract under a sunset clause without the purchaser's consent or the court's, which was introduced because some developers were terminating contracts and reselling into a risen market. We check the contract reflects that.
The developer's right to vary. Nearly every off-the-plan contract allows some variation to the plan and the finishes. The questions are how much, whether you get told, and whether you can do anything about it if the change is material. A clause allowing broad variation with no purchaser remedy is one worth pushing back on before signing.
The deposit and where it sits. How much, when it is payable, whether it is held in a trust account or released to the developer, and what happens to it if things go wrong.
Settlement mechanics. Off-the-plan settlement is usually triggered by registration of the plan and a notice from the developer, often on short notice. Knowing how much warning you get matters for arranging funds.
Default. What happens if you cannot settle. Penalty interest, forfeiture of the deposit, and whether the developer can pursue you for a shortfall on resale.
The owners corporation. For an apartment, the arrangements for the completed building — how the owners corporation will be set up, the initial budget, any management or service agreements the developer has entered into that will bind the owners after they take over.
The three risks people underestimate
Valuation at settlement. Your lender values the property when it is finished, not when you signed. If the market has moved, or the building has not turned out as expected, the valuation can come in below the contract price. The lender lends against the valuation and you have to fund the gap in cash. You are still bound to settle.
Finance approval expiring. Approvals last months. Off-the-plan settlements take years. You will be re-assessed closer to settlement on your circumstances and the lending rules at that time, and there is usually no finance condition to protect you.
Time. Construction runs late more often than it runs early. Between signing and settlement your life may change in ways that make the purchase harder, and the contract does not care.
None of this makes off-the-plan a bad way to buy. It makes it a way of buying that rewards reading the contract properly, and punishes not doing so more severely than an established purchase does.
What we do differently on these
We read the whole thing, including the schedules, and we do not rush it. Then we give you a list of what to ask for — not a theoretical list, but the changes that developers do sometimes agree to, particularly earlier in a project when they are still building sales momentum.
After that, we hold the file. We monitor registration, deal with the developer through the build, check what has been delivered against what you contracted for, and handle settlement when the notice arrives. On a two-year settlement that continuity is most of the value.
Frequently asked questions
What is a sunset clause?
A date by which the plan of subdivision must be registered or the building completed. If that date passes without it happening, the contract can be brought to an end. The clause protects both sides in principle, but it is the developer who controls the timetable, so how it is drafted matters a great deal. Victoria has legislated restrictions on a vendor ending a residential off-the-plan contract under a sunset clause, and we check whether the contract reflects them.
Can the developer change what I am buying?
Most off-the-plan contracts allow variation within limits — the plan of subdivision, the finishes, sometimes the dimensions. The question is how wide those limits are and whether you have any right to object or withdraw if the change is significant. That is one of the first clauses we look at, and one of the ones most worth negotiating before you sign.
When do I pay stamp duty on an off-the-plan purchase?
Duty is generally payable at settlement rather than at signing. Victoria also has an off-the-plan duty concession, which can reduce the dutiable value by the construction costs remaining at the date of the contract — so buying earlier in a project usually produces a better duty outcome than buying near completion. Eligibility and the way it is calculated have changed over time, so we work it out on the rules in force for your contract.
What if the valuation at settlement is lower than the price I agreed?
This is the risk buyers most often underestimate. Your lender values the property at settlement, not at signing. If the valuation falls short, the lender may lend less than expected and you have to find the difference in cash. You are still contractually bound to settle. It is worth planning for before you sign rather than discovering it two years later.
My finance approval will expire before settlement. Is that a problem?
It is normal, and it is a risk. Approvals typically last months while off-the-plan settlements can be years away, so you will need to be re-approved closer to the time — on your circumstances and the lending conditions as they are then, not as they are now. An off-the-plan contract usually gives you no finance condition to fall back on.
Can I sell before settlement?
Sometimes. Some contracts permit a nomination, where you nominate another buyer to take your place, and some prohibit or restrict it. Where it is permitted there can be duty consequences. If reselling before settlement is part of your thinking, tell us before you sign, because whether it is possible at all is decided by a clause in the contract.
Related services
Tell us the date you have been asked to sign by.
Send us the contract