Conveyancing for off-the-plan – what’s involved?

When purchasing a unit off-the-plan—that is, a property in a building that is still under construction—there are several unique legal and practical considerations that both buyers and developers must navigate. Unlike an existing property, there is no current title or survey plan available for the specific lot you are purchasing. As a result, there are additional steps, documents, and potential compliance issues to ensure the property and the associated legal arrangements, such as those involving the body corporate, are properly addressed.

Key Steps in Off-the-Plan Conveyancing

1. Disclosure Plan and Disclosure Statement
   Before entering into a contract, the developer is legally required to provide the buyer with both a disclosure plan and a disclosure statement. These documents outline critical information about the property, including:

   • The lot’s dimensions
   • Proposed layout and boundaries
   • Shared facilities and common property

   Additionally, the disclosure statement typically includes the proposed bylaws for the body corporate, the management agreement with the body corporate caretaker, and the secretarial agreement with the body corporate secretary. These documents establish the rules and regulations for the building’s communal spaces and governance.

2. Schedule of Specifications and Finishes
   One important section of the disclosure documents is the schedule of specifications and finishes. This outlines the materials, fittings, and fixtures that will be used in the unit, such as flooring, kitchen finishes, and bathroom fixtures. Buyers must review this schedule carefully to ensure it meets their expectations. The developer may have some flexibility to vary these items, but any material changes to the specifications must be disclosed.

Rights and Obligations During Construction

1. Material Changes and Further Disclosure Statements
   If significant changes occur during the construction process—such as alterations to the design, layout, or finishes—the developer must issue a further disclosure statement. Buyers may have the right to:

   • Terminate the contract if the changes materially affect the property’s value or functionality.
   • Claim compensation if the changes reduce the property’s value or cause a significant departure from the original agreement.

   These rights ensure that buyers are protected from unexpected alterations that may affect their enjoyment or use of the property.

2. Completion of Construction and Survey Plan Registration
   As the construction nears completion, the developer’s solicitor will notify the buyer’s solicitor of key milestones:

   • When construction is complete
   • When the survey plan for the unit is registered with the titles office

   Once the survey plan is registered, the property is legally defined, and the unit can be transferred to the buyer. Typically, settlement is required 14 to 21 days after notification of survey plan registration.

Preparing for Settlement

Buyers must ensure their financial arrangements are in place well in advance of settlement. Here are key points to consider:

• Final Loan Arrangements
  Buyers should work closely with their lender to ensure that loan documents are completed and approved before settlement. The lender must be ready to advance the required funds for the purchase within the 14 or 21-day settlement window after survey plan registration.

• Legal Review and Compliance
  The buyer’s solicitor should carefully review the final survey plan and any updated disclosure documents to ensure that there are no discrepancies between what was promised and what has been delivered.

FAQs: Off-the-Plan Conveyancing

1. What is a disclosure plan?
A disclosure plan outlines the dimensions, layout, and other key details of the property being purchased. It provides a snapshot of what the unit will look like once construction is complete.

2. Can a developer change the design or finishes during construction?
Yes, the developer may make changes to the design or finishes. However, any material changes must be disclosed to the buyer, and the buyer may have the right to terminate the contract or claim compensation if the changes negatively impact the property.

3. When does settlement occur in off-the-plan purchases?
Settlement typically occurs 14 or 21 days after the developer registers the survey plan with the titles office. Buyers will be notified when this registration occurs, and they must be prepared to complete the settlement within this timeframe.

4. What happens if my loan is not ready by settlement?
If a buyer is unable to complete the settlement on time due to financial issues, they may risk breach of contract. It’s crucial to have all loan documents finalized well in advance of the expected settlement date to avoid complications.

Final Considerations

Buying a property off-the-plan offers several benefits, such as securing a new unit at today’s prices while it’s still being constructed. However, it also comes with additional risks and legal obligations. Ensuring that you understand the disclosure documents, monitoring changes during construction, and preparing for settlement are all critical steps in ensuring a smooth and successful purchase.

If you’re considering an off-the-plan purchase, it’s highly advisable to consult with a solicitor who specializes in conveyancing to guide you through the process and protect your interests.