I’m sure you will agree that Canberra has experienced a boon of new apartment developments in the past few years. You don’t have to cast your gaze too far to see that this trend is not going to change much in the coming years. With substantial development of the Northbourne corridor combined with the significant precincts marked for further supply of apartments in Belconnen, Greenway and Kingston, it is certain that much of the residential sales market in the near future will consist of buyers purchasing property “off the plan” – that is, they will be purchased from the architect’s plan before they’re even built.
Buying off the plan is fundamentally different to more traditional property transactions, as purchasers are required to place a great deal of faith in the development before they have a chance to see the finished product. This presents a number of unique challenges and requires some additional thought on the part of the buyer.
In the ACT it is required that a complete sales contract is prepared before any property is placed on the market for sale. This is also applicable to “off the plan” sales. Specifically in relation to off the plan sales, in order for a contract to be complete it is required that certain information is disclosed in the contract regarding the yet to be created Units Plan.
In simple terms, the contract must include an estimate of what the buyer will have to pay in strata levies for two years after settlement.
Also required to be disclosed are the proposed “rules” of the Units Plan as well as confirmation should the developer plan to approve the keeping of pets by purchasers.
The rules around disclosure are designed to inform buyers and protect them from any unwelcome surprises. However, considering that the units are sold often 1 or 2 years before they are finished, estimating much of the information can be more of an art than a science. Anyone considering purchasing off the plan would be well advised to carefully scrutinise the information disclosed in the sales contracts and, when in doubt, ask for further explanation from the strata manager or agent who prepared the information.