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OFF THE PLAN

Off the Plan Contracts and Reviews

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OFF THE PLAN

Off the Plan Contracts in Brisbane

A.L.F. Lawyers is an off the plan property lawyer Queensland buyers trust for clear, practical advice before signing. We review off the plan contracts for buyers across Brisbane and Queensland. Off the plan contracts involve distinct legal risks which are not present in standard residential conveyancing, including sunset clauses, the developer’s right to vary plans and specifications, settlement periods that can run for years, and limited buyer rights once the contract is signed.
The single most important point about off the plan purchases is that the legal protections in the contract are determined at the time of signing. As your off the plan contract lawyer Brisbane, we review the contract before you sign, identify the risks, and advise on the terms you should negotiate before committing.
THE BASICS

What is an off the plan contract?

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An off the plan contract is a contract to buy property that has not yet been built or, in the case of vacant land, where the lot has not yet been created by registration of the plan of subdivision. The buyer commits to the purchase at a fixed price, pays a deposit, and waits for the developer to complete the relevant pre-conditions, construction and/or plan registration, before settlement occurs.
The period between signing and settlement is commonly measured in years, not months. During that time, the developer’s circumstances, the property market, the buyer’s financial position, and the regulatory environment can all change.
Off the plan purchases are most common for apartments, townhouses, house and land packages, and lots in new vacant land subdivisions. Each carries its own variation of the standard risks discussed below.
KNOW THE RISKS

The risks unique to off the plan

Off the plan contracts carry categories of risk that do not arise in a standard residential purchase. Understanding these off the plan settlement risks before you sign is essential.

The sunset date is the date by which the developer must complete the pre-conditions to settlement, typically development approval, construction completion, registration of the plan of subdivision, and issue of the certificate of classification. If those pre-conditions are not met by the sunset date, the developer usually has a right to terminate the contract.


Off the plan sunset clauses in QLD are commonly drafted to give the developer broad termination rights and minimal buyer protection. A property purchased at a fixed price two years ago, in a rising market, is worth more today, and termination by the developer at the sunset date allows the developer to relist at the higher price. Sunset clauses need close attention before signing.

Off the plan contracts typically reserve the developer’s right to vary the building, the lot, the floor plan, the community management statement, the by-laws, the management agreements, the proposed budget and levies, and the area calculations. Variations may be required by the planning authority, the strata registrar, the developer’s financier, or for the developer’s own commercial reasons.

 

The buyer’s right to object to variations is usually limited to “material” variations and is constrained by tight notice periods. A buyer who fails to object correctly may be deemed to have accepted the variation.

Beyond the sunset clause, off the plan contracts usually give the developer additional termination rights, such as where required approvals are not obtained, where the developer determines the project is no longer economically viable, or where the developer’s financier withdraws support. The deposit is refundable in those circumstances, but the buyer loses the property and the price.
One of the most significant off the plan settlement risks is the tight settlement window. The standard settlement period is often 14 days after the developer gives notice of plan registration. Most lenders cannot meet this timeframe for a property they have not yet valued or where the finance application has not been finalised due to construction delays.

Off the plan contracts are typically not conditional on finance. If finance is not in place by the settlement date, the buyer is in default. The buyer’s exposure includes loss of the deposit, liability for damages, and liability for any shortfall on the developer’s resale of the property.

 

Where the buyer requires finance, two practical issues need to be understood before signing.

 

First, most lenders will not provide formal finance approval for an off the plan property until the lot has been created – in the case of vacant land – or constructed and valued – in the case of an apartment or house. A pre-approval given at the time of signing is not the same as formal approval, and the lender will require a fresh valuation closer to settlement.

 

Second, finance approvals are issued for a fixed period, typically 3 to 6 months. For off the plan contracts where settlement is years away, the approval will need to be renewed, sometimes more than once. The approval at signing may not align with the settlement timeframe, and the buyer’s financial circumstances at the time of renewal may be different.

 

These are reasons why off the plan contracts carry meaningful finance risk for the buyer, even where a pre-approval is in hand at the time of signing.

The buyer’s right to inspect is typically limited to a single pre-settlement inspection, accompanied by the developer’s representative. Identified defects are usually rectified after settlement, not before. The buyer cannot withhold any part of the purchase price for outstanding defects.
OUR CHECKLIST

What we review in an off the plan contract

As part of our off the plan contract review in Brisbane, we examine:
  • The sunset date and the developer's pre-conditions to settlement
  • The developer's right to vary the plans, specifications, community management statement, by-laws and management agreements
  • The developer's right to terminate (sunset, financier, commercial viability)
  • The settlement period and the buyer's ability to extend
  • The deposit (cash, bank guarantee, or deposit bond), how it is held, and entitlement to interest
  • The community management statement, by-laws, and lot entitlements (contribution and interest)
  • The proposed budget and levies
  • Service agreements: body corporate management, caretaker, and on-site letting agreements
  • The schedule of fixtures and fittings and any variation rights
  • The pre-settlement inspection and defect rectification regime
  • Power of attorney and proxy provisions granted to the developer
  • GST treatment and margin scheme application
  • Foreign person status and FIRB implications
  • Stamp duty position, including any off the plan concession; and
  • Settlement adjustments for body corporate levies, rates, land tax and insurance.

Contact Our Team

Don’t sign anything until you’ve spoken to us.
Property contracts are complex, and the wrong advice at the wrong time can cost you dearly. Our conveyancing lawyers will review your contract in full, explain exactly what you’re agreeing to, and identify any conditions or clauses that put you at risk before you’re legally bound.

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COSTS & TIMEFRAMES

Cost and turnaround

Off the plan conveyancing in Brisbane involves a higher degree of complexity than a standard residential contract review. We charge a fixed fee, agreed in writing before we commence, which reflects that additional complexity.
Most reviews are completed within 2 to 3 business days of receiving the full contract and disclosure documents.
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COMMON QUESTIONS

Frequently asked questions

Can I get out of an off the plan contract after signing?
Your termination rights after signing are limited to the rights set out in the contract and to the statutory cooling off period (5 business days for residential contracts in Queensland). Outside those rights, you cannot generally walk away without exposing yourself to forfeiture of the deposit and a claim for damages by the developer.
The sunset clause is the contractual mechanism that gives the developer and sometimes the buyer the right to terminate the contract if the pre-conditions to settlement are not met by a specified date. Understanding off the plan sunset clauses in QLD is one of the most important aspects of any contract review. Pre-conditions typically include development approval, completion of construction, registration of the plan of subdivision, and issue of a certificate of classification.
Yes. The buyer pays stamp duty (transfer duty) on the contract price. In some circumstances, a concession may reduce the duty payable, particularly for owner-occupiers. We advise on whether you qualify at the off the plan contract review Brisbane stage.
The developer typically has broad rights to vary the plans, specifications, by-laws, management agreements, budget and other key contract terms. The buyer’s right to object is usually limited to variations that materially prejudice the buyer, and the objection must be made within a tight notice period. We advise on the variation provisions before you sign.
Off the plan contracts are typically not conditional on finance, which means you commit to settling regardless of whether finance is approved. Most buyers should ensure they have a finance pre-approval in place before signing, and we usually recommend negotiating a finance condition into the contract where the developer agrees.
Most off the plan contracts allow the buyer to provide a deposit bond, bank guarantee or insurance bond instead of a cash deposit. We confirm what your contract allows.
Yes. Foreign buyers of off the plan residential property in Queensland are subject to FIRB approval requirements and additional foreign acquirer duty. We advise on the foreign buyer position at the contract review stage.
Construction timeframes vary widely. For an apartment building, the typical sunset date is 18 to 36 months after contract date. For a house and land package, it may be 6 to 18 months. The contract specifies the sunset date.
Yes. As an off the plan property lawyer Queensland-wide, we act for buyers across Queensland including Townsville and regional areas. We also act for interstate and overseas buyers purchasing off the plan in Queensland.