Developments are everywhere! Buying into a proposed development can allow buyers to get a cheaper, more customized (and potentially tax effective investment) property than an existing dwelling. However, there are additional factors to consider before signing on the dotted line.
What is a Sunset Date?
The date the plan is expected to be registered is termed the Sunset Date. Traditionally, you would then find the actual settlement date would occur shortly after. Developments can sometimes take years to2 complete – and this can still be at the mercy of council and developer, depending on negotiations.
A recent example of a development STILL not going ahead is the Icon Central building in Newcastle.
Don’t book the removalist just yet. Get an open and honest discussion before signing anything.
The layout looks great in the brochure…
A key component of buying off the plan is the need to understand the layout (including dimensions) of your purchase. Analyse the plan and measure out the spaces within your current living arrangements (use masking tape on the floor). You will get a good idea of what you are buying and what actually fits in your new space. You may get a shock…
The incredible shrinking apartment.
Contracts generally contain a provision for a 5% adjustment of floor space. YES, your property may reduce in size. Changes to the plan will cost the developer thousands of dollars, so it’s a common problem.
Strata fees mystery
If a Strata Plan is created, you will only receive estimations of ongoing costs, as there is no financial history.
When the strata levies are significantly higher than advertised, a lot of pressure can be put on the new owners to make additional contributions to the group.
You wanted those perks…
Pool, gym, gardens & elevators look great, but will mean higher strata fees and maintenance costs. Make sure you do your research around these features before purchase.
The shiny things
The completed property and your imagination need to stay aligned. Variations to the expected finishes you see in the glossy brochures and displays can happen and expectations need to be managed. It’s in the best interests of the developer to get the finishes right, however ideas and available products can possible change when it’s time to fit out your property. If there's a display apartment available to view, take some time to look around and ask lots of questions.
If you have any questions about your situation, contact me via leah@stevensconveyancing.com.au or call 0414 894 031 to discuss.
Please note that the information contained in this article is of a general nature only and does not constitute legal advice. Stevens Conveyancing does not take responsibility for any errors or omissions obtained from the use of this information.