Off The Plan Residential Sale:

The sale of residential property off the plan is the sale of property which is still in the process of construction. Off the plan sales can take a long time to complete, and it is not uncommon for contracts to reach settlement months after they have been exchanged. Off the plan sale of land contracts are exceptionally voluminous in light of the uncertainties and contingencies involved in the project. This is because the properties are being sold as they are being built.

Off the plan sales are generally associated with strata developments where there are many units being build in a large residential complex. Often, the sales themselves fund the construction phases of the development of the residential complex project. As a consequence, it may be the case that an owner (or prospective owner of an off the plan property) may not be able to enjoy the benefits of the property until all of the units have been sold, thus facilitating a completion of the development.

The uncertainties associated with the off the plan residential sale mean that there will be various conditions and contingencies built into the sales contract which allow parties to withdraw from contractual relations. These may involve:

(a)   Stipulated timeframes within which the development project is expected to be completed. In the event that the deadlines are not met, a party may elect to opt out of the purchase. There may be various liabilities that may need to be paid nonetheless. These will be particular to each contract and will need to be investigated by an off the plan sales solicitor so that the client (prospective owner of the property) can be properly advised;

(b)   The registration of a strata scheme which will allow the property to be sold to prospective owners by conferring strata title to them;

(c)    Changes to the development, which may be more than trivial, can arguably ground a right of rescission on part of either the vendor or the purchaser; and

(d)   The issuing of any certificates, or the granting of any permissions or allowances by relevant statutory, government or other authorities which are necessary for the use or occupation of the property after construction (or indeed, which are necessary for the completion of the construction project itself).

Other problems may arise which affect the completion of a residential development for an off the plan sale. These can include disputes between the property developer, the builder, union activity, or government or local council intervention. The off the plan sales contract should ordinarily contain provisions that deal with such contingencies. An off the plan sales lawyer should be retained to provide legal advice on the off the plan sales contract so that the rights and liabilities of the vendor and the purchaser are clear and unambiguous. In some situations, disputes can lead to litigation. Litigation concerning off the plan sales in residential property will need to be prosecuted efficiently and economically. The most common litigation cases involving off the plan sales will involve:

• Allegations of breach of contract:
  • Breach of express terms; and
  • Breach of implied terms.
• Allegations of breach of duty of care;
• Allegations of interference in a contract by a third party;
• Failure to discharge a contractual duty;
• Claim in damages for loss resulting from failure to complete; and
• Claim for deposit paid.

For developers, the solicitor retained to advice on the off the plan sales contract can provide legal services in respect of assisting with the drafting and compilation of the off the plan sales contract, drafting special conditions that provide the necessary flexibility to developers, assist in the registration process, liaison with town planners, architects, engineers and statutory or relevant government representatives. A lawyer who is retained to advise on the off the plan sales contract will be able to monitor and advise the property developer in relation to the progress of the development while liaising with the development’s project managers.

If you wish to make an appointment, please contact us by telephone on (02) 9233 4048 or send an email to info@navado.com. 

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.