Buying off the plan apartments in Brisbane is common. In many ways, it is advantageous to the buyers to buy apartments before they are built. However, there are also pitfalls that they need to avoid. Before you sign the contracts, here is a good read about the basics of off the plan apartment buying.
Most notable advantages of buying Brisbane apartments off the plan is the lower price. You can also have a say on your apartment’s layout or customise its interiors. Off the plan buyers also have the advantage of getting the best units of the building. And they are also afforded ample time to prepare for the move and financial planning.
Check out our more detailed discussion on the advantages and disadvantages of buying apartments off the plan. See the article here.
A Closer Look: The Contract
The contract is binding once it is signed by both parties. Delivery of the item, or of the apartment is set to some future date, and should be stated in the contract. Here are some other contract items that you need to know and for a lawyer to examine before signing;
Ø Cooling Off Period. The state allows you to cancel the contract within five days of signing and getting a signed copy. A penalty of up to 0.25% of the contract price can be charged by the seller.
Ø Plan Disclosure Statement. This includes specific details of the plan – unit and floor number, what you can expect upon delivery, construction materials to be used, floor plans, and measurements are just some of the details. The disclosure should also include dated forecast percentage of completion.
Ø Inclusions and Warranties. This includes a list of what will be delivered to you – fixtures, fittings, finishes, appliances, and furniture. This is a significant section as it protects buyers from getting something different from what they are expecting.
Ø Defects. This is the section where the seller gives the buyer the chance to assess the property before delivery, and to determine if there has been any defects or departure from what is expected.
Ø Completion. Estimated completion date should be clearly stated. It is also common for Brisbane apartment off the plan contracts to include completion allowances, or option for the seller to extend the date provided there is a valid reason.
Ø Financing Condition. This is your condition of the contract. In essence, you are asking for a period, usually 2-4 weeks, to secure financing from the bank or lenders. This section can be omitted if you’re buying cash.
Ø Deposit. Deposits for off the plan apartment purchases are usually invested. Check out who gets the interest income.
A Closer Look: The Developer
Off the plan purchases are based on a promise to deliver at a given future date. So you pay now, sign a purchase contract for something that does not exist, yet. More than the property, you are also investing on the builder’s reputation. It is highly advised that you get to know the developers before you even look at the plans. Check the company, their previous projects, know who its directors, partners, and owners are, and if there has been any lawsuits filed against them and for what reasons. Lastly, obtain the building license used on the project you will be buying into, check the issuance and expiry dates, any penalty notices attached, and of any suspension or cancellation.
The Neighbourhood Review
Location is one of the top selling points of Brisbane apartments. Aside from the views, presence of establishments, and proximity to amenities, you should also look into the prospects of the community. Is it still a developing and bustling hub or is the apartment located in an established community with a definite culture and rhythm of its own? Are the residents home owners or renters? Are they too aloof, too friendly, or just perfect? Can you easily fit into your new neighbourhood?
Home Warranty Insurance
Developers are legally required to provide home warranty insurance for all off the plan purchases of apartments in Brisbane. This will cover risks of non-completion, loss of deposit, developer bankruptcy, and breach of statutory warranty. The certificate should include the buyer’s name, address of the property, name of the developer and the insurer, and the insurance amount.
As in any real estate property purchase, intensive research, caution, and consultation with Brisbane’s real estate professionals will protect buyers from getting into a disadvantaged position. Learn more about Queensland laws and provisions on buying off the plan apartments here.
Off the plan buying of apartments in Brisbane comes with a certain risks. But if you know your rights, buy from trusted builders, work with trusted real estate professionals, proceed with caution, and look into all your options, you’re effectively eliminating most, if not all of the risks.