Last month we touched on the idea that when you buy off-the-plan, the property you are contracting for now may be different to what is delivered in the future.
More and more off-the-plan contracts are being skewed in the developer’s favour, to the point where one recent purchaser discovered that his one bedroom apartment was now a studio. We have seen contracts which state that the area, finishes and even the location are subject to change depending on what is required or ‘desirable’ by the developer.
Not limited to apartments, housing developments often encounter design hiccups during building, resulting in changes to floor plans or finishes.
The contract will typically provide that if changes are made which materially and adversely affect the value of the property, the purchaser may rescind. The practical problem is that if you have locked the deposit away in this contract for two or three years and spent time and money on the purchase, rescinding the contract may be equally as undesirable as continuing the settlement of the altered property.
How do you protect yourself against this? We strongly advise inserting wording into the contract which confirms the floorplan, layout and location of the finished property. If the developer is unwilling to accommodate this, you should seriously consider not proceeding.
If you have further questions, please contact us at frank@franklaw.com.au
This is not legal advice.