Off The Plan Contracts – Buyers Beware

As we live with increased density and new apartment buildings seem to appear every day, off-the-plan contracts are becoming increasingly prevalent.

Regardless of whether you are a vendor or purchaser there are several pitfalls you need to be aware of before entering into an off-the-plan contract. Essentially, failing to understand your obligations (and rights) when it comes to off-the-plan contracts can be costly.

There are unforeseen risks for the purchaser when buying a property which have led to important (but complex) purchaser protections becoming mandated in legislation.

Fortunately, the risks to both vendors and purchasers can be minimised through consultation with experienced legal professionals, to ensure you are fully aware of all obligations and rights when it comes to purchasing off-the-plan.

What are the key considerations often not considered

If a vendor fails to comply with their legal obligations when selling off-the-plan, a purchaser may have the right to terminate the contract, which could be detrimental to the continued construction of the plan.

It is important, therefore, that vendors and purchasers consider carefully (and with the help of experienced legal professionals) the requirements of the contract when it comes to off-the-plan sales, particularly:

  • Unregistered plans

Prior to entering a contract for unregistered plans, it is imperative vendors are aware of their obligations under the Sale of Land Act 1962 (Vic) (SLA), and in particular s 9AA. These provisions involve specific requirements about how deposit money is to be held and notice requirements. The SLA gives purchasers the right to rescind the contract if strict compliance is not met. The purchaser must exercise their rights as a matter of urgency.

  • Disclosure requirements

If a purchaser believes the final product delivered to them is not what they had been promised, there are protections in place which may allow them to rescind the contract prior to settlement. For example, s 9AC(1) imposes a duty on vendors to advise the purchaser, within 14 days, of any amendment to the plan of subdivision; and s 9AC(2) allows the buyer time to review the changes before proceeding.

The purchaser must act quickly to exercise their rights by obtaining advice.

  • Sunset clauses

It is crucial that a vendor is aware of any sunset clauses within an off-the-plan contract, and that they obtain legal assistance to ensure they can meet their obligations under these provisions before entering the contract. This is essential as the sunset clause will state the expiration date for completing the property, any non-compliance and delay will mean that the purchaser’s deposit is refunded and any developer is freed from their obligation.

  • Owners Corporation

If the lot you are selling is affected by an owners corporation, the owners corporation must have insurance under s 11 of the SLA, or the purchaser has the right to avoid the sale at any time before settlement.

Understanding the proposed plan of subdivision

It is important that purchasers know exactly what it is they intend to buy – including the location, lot dimensions and boundaries, car parks, and any easements included. Communicating this to your legal practitioner will allow them to ensure your understanding of the plan is consistent with the plan of subdivision itself, or whether there is a material difference between the proposed and final registered plans.

Our Services

At Oldham Construction Lawyers, we are determined to ensure that our clients get the best possible outcome when it comes to off-the-plan contracts.

Recently we successfully applied to the County Court to rescind an off the plan contract for a purchaser. In that case, the vendor had provided a marketing brochure that represented the apartment as approx. 50sqm. When the inspection occurred, the purchaser measured the apartment at approx. 10% less than what was advertised. Oldham Construction Lawyers were successful in obtaining a refund of the purchaser’s deposit.

Our experts provide specialist advice and professional guidance for clients engaged in off-the-plan transactions to minimise the legal risks to you by ensuring legal compliance in each step of the contracting process.

Your off-the-plan matter will be handled by Daniel Oldham and his team of dedicated lawyers, who will aim to resolve your issue in the most cost and time efficient manner.

To arrange an appointment today, call Daniel on 03 9640 0002, or email

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