Educate Yourself About Law

Why Disclosure Is Crucial When Buying Off the Plan

by Erika Reed

If you're looking for a new place to live but are quite picky, then you may sometimes need to compromise. You may, for example, have discovered a development that seems to tick all the boxes but has yet to be built. In this case, the developer may invite you to purchase 'off the plan', and you may be able to take advantage of a financial break because of this, but you also need to be very aware of your rights at the same time. What do you need to know about disclosure, for example?

Initial Assessment

Obviously, you will need to look very carefully at the plans for the building together with any renderings or other marketing materials. You need to determine if the property is of the correct size and configuration or whether it has the right aspect or exposure for your needs.

Disclosure Statement

The developer is also required to provide you with a list of documents before you sign the contract. In addition to the basic information, this type of statement will also tell you if there are any easements, covenants or restrictions, and if it is a strata development, give you details about potential bylaws.

Studying the Terms

Study these bylaws carefully, as they may be restrictive. Sometimes, a particular ordinance may make it impossible for you to enjoy ownership once they've delivered the property. Perhaps certain types of pet ownership are banned, or you may only be able to use your balcony for specific purposes.

Additional Requirements

Furthermore, the developer must provide you with any updates or amendments following the date of the contract and before settlement. If the strata plan managers change any details, then this must be brought to your attention, and the change must be acceptable to you. If not, then you may be able to walk out of the contract. Just remember, you will need to show that you would not have entered into the contract if that change had been clear from the outset. You may also be able to stay the course, but claim a certain amount of compensation due to the change.

Being Diligent

If you want to buy off the plan, then you will need to exercise even more care than you would otherwise and make sure that your due diligence is extensive. Work with your conveyancer to make sure that you get the disclosure statement and any subsequent changes as soon as they are available.