What Is an Off the Plan Unit in Real Estate?
Buying off the plan essentially means that you are buying a unit or property that is not yet constructed and registered. You sign with a property developer and commit a build time anywhere from 12-48 months, although this can vary widely.
When buying off the plan, you will be able to see the developer’s designs and renders, and occasionally there will be a display unit in the same style to view, but you won’t see the unit you have purchased until it has been constructed.
If you are a hopeful Queensland home buyer, you are likely to come across off the plan developments. In high-growth areas especially like Brisbane, the Gold Coast, and the Sunshine Coast, Queensland real estate off the plan units is becoming more and more common as the region continues to grow.
You will be required to pay a deposit at entering into the Contract however the final payment will be due at settlement. Given the length of time involved between Contract signing and settlement, it is difficult to obtain finance approval as most developers won’t agree to long term finance conditions and finance approvals only generally last for 3 months at a time.
Key Benefits of Buying Off the Plan Queensland
The benefit of buying an off the plan unit is that you sign a Contract at today’s prices and pay nothing apart from the deposit until the build is completed, meaning you could benefit from capital growth in the meantime. However, this is dependant on the markets and can also be a disadvantage in declining markets or an influx of available property which can create oversupply which could potentially result in you paying more than what the unit is worth.
Buying off the plan is also a purchase type that will make you eligible for the first-home buyer scheme Queensland, which preferences new builds (upon meeting eligibility). That will put an extra $30,000 into your pocket for buying your home if you are a first-time buyer Queensland.
Another significant benefit is the opportunity to have a say in how your home turns out. Because you are purchasing before the home is built, you may be able to give your input into design elements like fixtures, layout, finishings and fences while your home is under construction. This is largely dependent on the developer you choose, however, so if it’s important to you to have that input, you should have that conversation before signing a contract.
The Risks of Buying Off the Plan
Buying an off the plan unit is generally subject to the Developer obtaining enough pre-sales and finance approval to complete the build, if the developer doesn’t satisfy these elements, they are entitled to terminate the Contract and release any deposit back to you.
You may also find yourself at the mercy of the developer when you buy off the plan. Delays, project cancellations, or insolvency are all potential problems. This is where solid legal advice becomes critical. Having an expert in off the plan unit conveyancing Queensland in your corner throughout this process will help ensure that you are aware of your rights and that the contract is set up to protect you against developer issues.
Legal considerations Off the Plan Queensland
It is your responsibility as a buyer to make sure that the contract you sign protects you against the common pitfalls of off the plan property in Queensland. It is important to understand your legal rights when buying off the plan, as well as your responsibilities and the responsibility of the seller.
- Sunset clause Queensland laws were recently amended to provide more protection to buyers. In an off the plan contract, the sunset clause outlines the last date when the settlement can take place, after which the buyer can terminate the agreement. Apartments and townhouses typically have much longer timeframes than standalone homes, and therefore longer timeframes for sunset clauses.
- Defects liability period is a period (typically 3 months in Queensland) when you can report defects to the developer and they are required to fix these issues. It’s important to understand though that often problems take longer to become apparent than the timeframe given, after which there’s not too much you can do about it. Reviewing any Queensland off the plan contracts with a legal pro is a great way to understand your defects liability period and get a game plan in place to ensure you’re not missing important details.
- Cooling-off periods apply to off the plan purchases, and the Queensland cooling-off period for off the plan purchases is 5 business days.
- Disclosure Requirements mean that the seller is required to disclose specific important information to help you as a buyer make an informed choice about your purchase. They must clearly state unit you are buying, and their claims of future registration of title. This is another legal document that could get you into trouble if you sign it before thoroughly understanding it. Getting a review done by a Queensland real estate lawyer to make sure everyone is on the same page before the deal goes ahead is highly advisable.
- Body Corporate rules and fees will be a key purchase consideration if you are buying a unit or apartment. Each development may have different rules because of local laws and restrictions, so make sure you understand what you’re signing up for if your new property will operate within a body corporate or strata.
Protecting Yourself Against the Risks of Buying Off the Plan Queensland
Knowing about a developer’s track record with completed projects will tell you a lot about what you can expect, so do your research before engaging. If they have a great public reputation with lots of completed work under their belt then that’s a fantastic green flag, and if they don’t then proceed with caution.
When buying off the plan units in Queensland the legal responsibility to protect your interests, falls to you. Having an experienced Queensland legal professional on your team to review contracts and give legal advice is invaluable. In Queensland, conveyancing professionals are required to be supervised by qualified solicitors, so they can provide holistic legal advice throughout the sale.
The earlier you engage with a Queensland conveyancer, the more help we can provide at no extra cost. At Bush to Beach Legal, we provide fixed-fee conveyancing Queensland, with a free contract review to help ensure there are no unexpected costs or legal surprises down the track. We are experienced in working with off the plan unit developments in Brisbane, Gold Coast, Sunshine Coast, Townsville, Logan, Airlie Beach and all across Queensland.
Each area has its own legal quirks and considerations, so working with a local conveyancing lawyer provides an additional layer of expertise and support. Have a look at our conveyancing office locations to find one that’s close to you and your future home.
Conclusion
Buying off the plan can feel risky, and there are extra considerations that you need to be aware of. Having an understanding and interest in the process is going to serve you well, and if you read this far, then you’ve got that covered! Getting a legal professional who can guide you through the legal and conveyancing process Queensland is the other key piece of the puzzle. A local conveyancer will be able to help you understand and avoid the common pitfalls of buying off the plan and get you into your new home with less stress.
