Are you looking to buy an off the plan property?
By Marilyn Ma, Solicitor – 9 March 2018
Off the plan Contracts and their accompanying Disclosure Statements are often lengthy documents which resemble textbooks.
We wish to stress the importance of carefully perusing these documents and having the Disclosure Statement and Contract reviewed by a solicitor prior to your execution of the Contract.
There may be clauses in the Contract which are not favourable to the Purchaser. The proposed levies may be extremely high. The Community Management Statement By – Laws may not be suitable to you. The Schedule of fixtures and fittings may not be as what was originally described.
A solicitor’s review of the Disclosure Statement and Contract will help identify the important issues to be aware of and assist with the negotiation of any changes required by the Purchaser BEFORE the Contract is signed. If the Seller is not agreeable to a change to the Contract which is imperative to you, then the Contract need not be executed and no money would be lost by you.
On the other hand, if the Contract is signed and you realise after execution of the Contract and during the Cooling Off Period that an important change is needed to which the Seller is not agreeable, then you would have no choice but to proceed without the change or terminate the Contract under the Cooling Off Period and the Seller would be entitled to a penalty payment of up to 0.25% of the purchase price. On a purchase price of $600,000.00, that would be $1,500.00!
Even worse situations may arise if it is realised after the expiry of the Cooling Off period that an important issue was not addressed, and the Purchaser is unable to proceed to settlement, the Purchaser may lose their entire deposit, usually 10 % of the purchase price. A very high price to pay for failing to properly peruse the Disclosure Statement and Contract.
Review it before you sign it!