Recently buying a property “off the plan” has become more and more common place for both investors and home buyers.
A key reason for developers to sell off the plan is to secure as many sales as possible to obtain funding from their lenders. Once a buyer has committed to purchase, a contract should be provided which details the particular of the purchase, including price, floor plans, lot details, sunset dates and settlement time frames.
While buying off the plan appears great in theory and can result in rewards, there are a lot of statutory obligations to be complied with to ensure that the parties enter into a binding contract. The most common non-compliance issues in off the plan contracts appear in the disclosure statement.
In order to comply with the requirements of section 213 of the BCCMA a disclosure statement to a contract must include the following:
|CHECKLIST FOR DISCLOSURE ENCLOSURES|
|1. Identify the proposed lot and be accompanied by a disclosure plan which complies with section 213AA;||✓|
|2. State the date by which the seller must settle the contract for sale. Also known as the sunset date;||✓|
|3. State the amount of annual contributions reasonably expected to be payable to the body corporate by the owner;||✓|
|4. Provide the terms of engagement for a person such as a body corporate manager, letting agent or service contractor, including the estimated cost of the engagement to the body corporate and the proportion of cost to be borne by the owner;||✓|
|5. Details of all proposed body corporate assets; and||✓|
|6. A copy of the proposed CMS and By laws.||✓|
The disclosure statement must be signed by the seller and must be substantially complete.
It is very important as a developer, to ensure that the information provided for in the disclosure statement is accurate and complete, otherwise the buyer may have a right to terminate the contract prior to settlement.
Contact us on 07 3009 8444 to obtain specialist advice on how to form a binding off the plan contract.