It can be daunting for a purchaser to receive the contract documentation in respect of an Off the Plan purchase. Often these purchases take considerable time to settle as the development can be a number of years in construction.
There are things that a purchaser on an Off the Plan purchase needs to be aware of including when they have a right to pull out of the contract when the development is excessively slow in being completed, how their property will be encumbered by the Plan of Subdivision and any Section 173 Agreement which may be included in the contract documentation.
Timely advice before you enter into an Off the Plan purchase is highly recommended.
It is important that your lawyer is aware of the ever-changing legislation and up to date Court decisions. For example, in June of 2009 the Supreme Court of Victoria handed down a decision in the landmark case of Clifford -v- Solid Investments Australia Pty Ltd concerning a dispute as to whether the purchasers of two (2) lots on the plan of subdivision of a multi-storey development have lawfully rescinded the contracts by which they bought those lots.
In this case, each of the contracts entered into by the purchasers was conditional upon registration of the plan of subdivision of the development. Each contract also conferred the right on the purchasers to avoid the contract if the plan was not registered on or before a certain date.
The contract provided for the plan registration date to be extended by the vendor. The vendor gave notice of several extensions. However the solicitors for the purchasers then gave notice of rescission of the contracts, which the vendor refused to accept. The vendor contended that the purchasers were bound to complete the contracts in accordance with their terms.
After hearing considerable argument, the Court ordered that, the contracts were lawfully rescinded by the purchasers and further ordered that the vendor return any bank guarantees given by the purchasers and pay the purchasers costs. This landmark case has considerable ramifications for off the plan purchasers, developers and financiers, especially during times of economic turmoil.
Please contact our office if you would like us to look at an Off the Plan contract.