Off the plan sales depend on the plan of subdivision being registered later. The contract must include prescribed terms, being terms about the amount and holding of the deposit, a conspicuous notice that it is an off the plan sale, and, for a residential contract with a sunset clause, the statutory notice about rescission rights under section 10F.
The vendor may amend the plan before registration under section 9AC but must advise the buyer, and the buyer may rescind if the amendment is material. Section 10 gives the buyer a right to avoid before registration where an amendment restricts the use of the lot, subject to exceptions. Where the natural surface level of the land will be altered, section 9AB requires a plan of those works in the contract, which does not apply to a multistorey plan. Where registration will create an owners corporation, section 9AAA obliges the vendor to hold and maintain the insurance required under the Owners Corporations Act 2006, though failure invokes a penalty rather than a right for the buyer to end the contract, and vendors rarely comply.
Because settlement can be a long way off, the buyer's money and plans are committed for an extended period during which the market and the buyer's circumstances can change.
This is the kind of matter CMK Legal's property and conveyancing team handles.
Material amendments to the plan, long delays, and uncertain insurance are the recurring issues. The duty concessions and GST treatment for off the plan purchases are technical and affect the cost materially.
Law referenced: Sale of Land Act 1962 ss 9AAA, 9AB, 9AC, 9AE, 10, 10F; Owners Corporations Act 2006.