Buying off the plan involves securing a property using a Contract for Sale on an unconditional basis before the building has been constructed or completed. Although it may feel different buying a property without ‘walking through it’, almost all new apartment buildings are sold in this manner, so it is a very common way of buying property.

Buying off the plan can sometimes enable you to enter the property market at a lower price (albeit not always the case). This is possible as developers offer lower prices and financial incentives (such as rebates) in order to secure enough pre-sales to start the project. Thus, providing a great opportunity for both investors and home buyers. Whilst there may be good deals on offer, buyers should note that some properties sold this way are often based on estimated future prices and as such can be overpriced.

While it may be beneficial to purchase off the plan, there are a number of risks to be wary of. Therefore, it is important that you understand your legal rights and obligations before signing the contract. Written below are some things you should know before buying off the plan.


Payment of the deposit is due on exchange of contracts. This is a significant outlay given the often-lengthy timeframe for completion. The deposit must be held in trust for the buyer by the seller’s lawyer or agent. Ideally, the contract should provide for interest on the deposit to be paid to the buyer or at least shared equally between the parties.


When buying off the plan it’s important to remember that most contracts will not be subject to finance. This is usually because it can take months or years for the settlement to take place and banks will not be able to approve a loan to fund a settlement that far into the future. It is crucial for you to speak to your banker or finance broker before signing a contract to determine if your current financial situation will allow you to purchase a property. Even then, banks cannot usually accurately assess your ‘serviceability’ until they receive all of your financial information (pay slips, expenses, existing assets and liabilities, etc).

Some banks are happy to pre-approve your loan once you sign the contract; however, pre-approvals are only valid for a finite period of time and will be subject to a bank valuation of the property and verification before funds can be advanced. It is wise to save up more money during the lead-up to the settlement as valuations can often be less than the purchase price. If a lower valuation is given, you will need contribute further funds to cover the difference at settlement. Thus, by continuing to save you can alleviate any financial strain you may experience in the event of a valuation coming through short of the purchase price.

Due to the period between purchase and settlement, your financial and personal circumstances may change. The change may affect your ability to obtain a loan. Changing circumstances include redundancy, having children, relocation overseas, etc. Staying in contract with your banker or finance broker during construction will help alleviate potential time issues.
Of course, once you have secured finance and signed all mortgage documents for your property, you are one step closer to settling your property!


The contracts that are used in the off the plan sales are much more detailed then the traditional form of contract which are used in the everyday sale of established real estate. These contracts are always prepared by the developers solicitor and provided to your solicitor for review before signing. In most cases solicitors who have a thorough understanding of off the plan contracts will review a contact on your behalf in a matter of days and then provide their recommendations.

Defect or Maintenance Periods

When purchasing an off the plan home, you are not entering into a building contract. This means that you are not afforded with the same rights as a person who organises construction of their home by their chosen builder. Many (albeit not all) off the plan contracts will have a defects rectification clause giving buyers a right to request rectification of defects after settlement. The seller is often not required under the contract to repair any defects prior to settlement unless the property is uninhabitable or poses a safety risk to the occupier. Unfortunately defects clauses in most contracts limit the seller or builder’s liability by only requiring a repair of defined defects that do not included hairline cracks or items which are deemed not to be defects by the seller. It is therefore prudent that you have such clauses varied to ensure all defects that should be repaired, get repaired.

Sunset Clause and Delays

The sunset clause refers to a condition in the contract which specifies the maximum time frame the developer can take to complete the development before you have the right to pull out. This period is known as the ‘sunset period’. The ‘sunset’ period can be an indefinite period of time in some contracts. As such, you should consider whether you are willing to wait an extended period before purchasing.