Buying something that does not exist yet

Off the plan

An off-the-plan contract commits you now to buy something that will be finished later. The protections you have are specific, they are written into the Conveyancing Act 1919 (NSW), and most of them run on short deadlines.

General information, not legal advice. This page sets out how the law generally applies. It does not take account of your circumstances, and you should get advice about your own situation before acting on it. The official sources this page is written from are listed on it; where they differ from anything here, they are the authority.

Who this page is for

You are buying a plan, a render and a promise

Off-the-plan buyers sign a long contract for a property they cannot walk through, on a completion date that may be years away. Everything that would normally be settled by inspection — the size of the rooms, the finishes, the outlook, the parking space, the by-laws you will live under — is instead settled by documents. Reading those documents is the entire job.

The law recognises that imbalance and answers it with disclosure. The vendor has to tell you, in an approved form, what you are buying and what could change. The draft plan has to be prepared by a registered surveyor. If they fail to attach what is required, you may rescind. If what they disclosed later turns out to be wrong in a way that adversely affects your use or enjoyment of the lot, they have to tell you, and you may have a choice between walking away and claiming compensation.

Every one of those rights runs on a deadline measured from exchange or from the notice. That is the single most important thing to understand about an off-the-plan purchase: the protections are real, and they expire. If you receive a notice from a developer about a change, do not put it aside to deal with later. Send it the day it arrives.

The other half of the work is time. Long settlements mean your circumstances can change, your lender’s willingness can change, and the valuation at completion can differ from the price you agreed years earlier. That risk cannot be drafted away entirely, but it can be understood before you sign, and there are terms worth asking for.

How we help

What the work actually is

Checking the disclosure statement and the draft plan

Whether the approved form has been used, whether the draft plan and the other prescribed documents are attached, and whether what they describe is what you think you are buying. If something required is missing, that is a right, and it has a deadline.

Reading the sunset and conditional dates

What dates the contract sets, what has to happen by each of them, and what each party can do if it does not. Sunset dates matter to you as well as to the developer, and the restriction on a vendor rescinding under one is worth understanding before you sign.

The finishes, the plans and what may be varied

Off-the-plan contracts usually reserve to the developer a right to make changes within limits. We read what those limits actually are, because a broad variation clause can change the apartment you end up with.

Strata documents for a proposed scheme

The proposed by-laws, the management statement, the schedule of finishes and any building management or caretaking arrangement. Binding contracts entered into by a developer before the owners corporation exists can outlast the developer’s involvement, and you are entitled to see them.

Acting when a notice of change arrives

Assessing whether a notified change is a material particular, advising whether to rescind or to remain and claim compensation, and doing it inside the period the legislation allows. This is the point at which delay costs people their remedy.

Completion, long after you signed

Registration of the plan, the occupation certificate, the final inspection, checking that what was built matches what was promised, dealing with your lender’s valuation, and settling.

Questions

Questions people ask first

What is a disclosure statement?

A document in the form approved by the NSW Registrar General that a vendor must attach to an off-the-plan contract before you sign it. It sets out the key information about the lot you are buying, including the sunset date and other conditional events, and it comes with a draft plan prepared by a registered surveyor.

What if the disclosure statement was not attached?

You may be entitled to rescind the contract within a period set by the legislation, running from exchange. Raise it immediately. The right is real and the window is short.

Can the developer change the design after I sign?

Within the limits the contract sets, and subject to the disclosure rules. Where a change makes what was disclosed inaccurate in a material particular — that is, a change adversely affecting the use or enjoyment of the lot — the vendor must notify you, and you may be able to rescind or to stay in the contract and claim compensation. Both choices run on a period counted from the notice.

What is a sunset clause and can the developer use it to cancel my contract?

A sunset clause allows the contract to be ended if a specified event, usually registration of the plan or issue of the occupation certificate, has not occurred by a set date. A vendor generally cannot rescind under one without your consent or an order of the Supreme Court of New South Wales. The restriction was introduced because sunset clauses were being used to cancel contracts and resell at higher prices.

Is my deposit safe if the developer goes under?

A deposit or instalment paid under an off-the-plan contract must be held by the stakeholder in a trust or controlled money account for the duration of the contract and cannot be released to the vendor before completion. That protects the deposit itself. It does not protect you from the consequences of a project that never finishes, which is why the developer and the project are worth looking at too.

Is the cooling-off period different for off the plan?

A longer cooling-off period applies to an off-the-plan residential contract than to a completed home, and it can still be waived by a certificate under section 66W of the Conveyancing Act 1919 (NSW). Both periods are set by the legislation, so check the current position rather than a figure from a website.

What happens if my finance falls through before completion?

That is the practical risk of a long settlement. A lender’s approval given at signing does not bind it years later, and the valuation at completion may differ from the price you agreed. Failing to complete generally puts your deposit at risk and can expose you to further claims. It is worth planning for before you sign, not after.

What can I do about defects when it is finished?

Inspect before settlement and raise what you find. Beyond the contract, building work in New South Wales carries statutory protections, and a new strata building has its own regime for defects. Which of them applies depends on the building and the work, so it is a question to bring to us with the documents.

What to send us

Off-the-plan contracts are long and the important parts are in the schedules. Send the whole thing.

The contract for sale in full, including every annexure and schedule.
The disclosure statement and the draft plan attached to it.
The schedule of finishes, and any brochure or render you were given.
The proposed by-laws and management statement, for a strata or community scheme.
Any building management, caretaking or exclusive supply agreement disclosed to you.
The sunset date and any other dates the developer or agent has quoted you.
Any notice you have received from the developer about a change, and the date it arrived.
Your lender, and whether approval was given and when it expires.
The development name, the lot number and the address.