EDITION 13
Strata 101:
Purchasing Off-The-Plan
Have you considered these key items?
Buying a unit in an off-the-plan development should always be an exciting process as you’re looking to be part of something brand new. With that said, it’s always important to make consideration of things other than just the renders of the apartment, the price and the display suite. It’s best to be well informed and not rush into anything without ensuring that you have made all the right considerations as part of your purchase. In this edition of Strata 101, we have outlined some key items to keep in mind when purchasing into an off-the-plan development.
Developer’s Track Record
Investigate the developer’s history and reputation. Gain an understanding of their previous projects – were these delivered on time and how are they looking years down the track (although that can also depend on the approach the owners take to maintaining the building)? Developers with a strong track record of projects give comfort to purchasers.
Builder’s Credentials
Similar to the developer, the builder’s reputation is critical. Ensure they have a solid track record of delivering quality constructions on time and to standard – particularly developments of the nature that you’re looking to buy into. Research any past issues or disputes related to their work (generally an online search will reveal such issues) – this may include litigation or Fair Trading/NSW Government intervention.
If this is the first time that a builder is constructing a large-scale development, ensure that they have the required licences, key personnel and after care support.
In accordance with the Design Practitioners Act (NSW) NSW residents can access a free online register of all stop work, prohibition and building work rectification orders issued by the office of the NSW Building Commissioner. This information can be accessed by following this link or using the NSW Fair Trading website.
Understanding the Contract
Off-the-plan contracts can be lengthy. Engage a solicitor or conveyancer experienced in off-theplan purchases to review the contract thoroughly. They will help you understand critical clauses, such as sunset dates, variations in plans, and your rights if the development is delayed.
ICERT Ratings
ICERT (Independent Construction and Environmental Ratings Tool) ratings are a system implemented in New South Wales to assess and ensure the quality and sustainability of construction projects, particularly residential developments. These ratings are designed to provide transparency and assurance to buyers, developers, and other stakeholders about the standards and performance of new buildings. Developers and builders can apply to independent and accredited assessors who are qualified to evaluate various aspects of construction projects. These assessors come from diverse professional backgrounds, typically including engineering, architecture, and environmental science. These ratings will be presented as a score out of five and provide an independent and transparent evaluation that helps buyers make informed decisions and encourages developers to maintain high-quality building practices.
Stamp Duty Concessions
Investigate any stamp duty concessions available for off-the-plan purchases. These can vary and potentially save you a substantial amount of money. Check the eligibility criteria and apply within the required time frames. Engage a financial professional, advisor or mortgage broker experienced in off-the-plan purchases to review the concessions which may be available.
Inclusions and Finishes
Review the schedule of finishes and inclusions. Off-the-plan properties often come with a glossy marketing package, but ensure the reality matches the promise. Clarify what is included in the base price and what constitutes an upgrade (variations).
Projected Strata Fees
Review the anticipated strata budget and levy contributions. Common property amenities (such as pools, gyms, saunas) are an attractive asset but come with higher operating and maintenance costs. Purchasers should take the time to review the budget, understand the anticipated costs in year two (once certain warranties expire and a full maintenance program commences) and ask questions to ensure that they are understanding of and can afford the ongoing quarterly contributions which will be payable to the owners corporation and will ensure that the building and asset value is maintained and help avoid the need to raise any extraordinary contribution (‘special levy’).
Builders Enquiries and Defect Rectification
In more cases than not, residents of completed developments will have queries about finishes, colours, maintenance requirements and reporting defects requiring the builder’s re-attendance. Some builders will remain on site for a short period following occupation to attend to defects raised during pre-settlement inspections and move in; it is important that you understand your responsibility to report specific defects to the Strata Manager, Builder or Building Manager within the warranty limitation period; which will vary depending on the nature of the defect reported and contractual rights. In most cases major defects which relate to structure, safety or occupation have a six-year warranty period. The appointed Strata & Building Manager will possibly utilise software platforms such as BuildingLink to manage these items after occupancy. Some properties fall under Home Warranty (which acts like an insurance policy), others may be subject to latent defects insurance, some are subject of building bond inspections.
Future Development in the Area
Investigate any planned developments in the vicinity. Future construction can impact your property’s value, views, and overall living experience – it may bring a lot of amenities. It’s essential to understand how the area might change over the coming years.
For further general assistance or inquiries, feel free to reach out to our team—we’re always here to help!
Jack Stoker
Bright & Duggan Property Group
Email Jack.Stoker@bright‑duggan.com.au
Mobile 0476 111 368
Phone (02) 9902 7100
Website bright-duggan.com.au
Office 2/15 Wickham Street,
Wickham NSW 2293