Check up on both the builder and developer

Before committing to an off-the-plan purchase, it’s important to investigate the developer’s reputation. Review their past projects, inspect the quality of their finishes, and speak with previous buyers to gauge their experience, particularly regarding defect rectifications. Checking older developments is also recommended, as some issues take time to appear. Keep in mind that when you sign an off-the-plan contract, you are dealing with a developer who has the right to appoint or replace the builder. Just because one project was completed to a high standard does not guarantee that the same builder will be used for future developments. Additionally, many off-the-plan contracts allow the developer to assign their rights, meaning that the party ultimately responsible for construction may not be the same entity you initially researched or signed with.

Make sure the price is right

New developments often come with a premium price tag. Rather than focusing solely on advertised fixtures and finishes, compare similar properties in the area and evaluate the price based on a square meter basis. This provides a more accurate measure of value. Seeking professional advice can also help you make an informed decision before committing to a purchase.

How are you going to pay the purchase price on settlement?

Once contracts are exchanged and any cooling-off period has passed (if applicable), they become legally binding. If you are unable to secure finance, you are still obligated to complete the purchase. This can be a challenge, as lenders generally do not provide unconditional loan approval until construction or registration is finalised. Several factors could affect your ability to secure finance when settlement is due, including: Changes to your financial situation Banking lending criteria Valuations Settlement date

Before committing to an off-the-plan purchase, be certain about what is included in the property. Marketing materials and advertisements can be misleading, and contracts often exclude any pre-contractual representations. The final product may differ from what was initially advertised. To avoid misunderstandings, specify all fixtures and finishes in the contract. If you expect a particular brand or model of appliances, request that these details be explicitly included. Generic terms like "European appliances" provide no real assurance of quality or specific inclusions. Reviewing these details with your solicitor can help prevent disappointment and disputes down the track.

Most off-the-plan contracts include clauses that allow the developer to alter the original plans. The extent of these changes can vary significantly, making it important to have a solicitor review the terms before signing. Some contracts permit buyers to withdraw if changes go beyond minor modifications, while others only allow termination if the variation substantially reduces the property’s value. It’s also important to understand your rights if changes occur. Many contracts only give buyers the option to rescind, rather than seek a price reduction. This can be a difficult choice, especially if property values have risen since signing, leaving limited alternatives at the same price point. Where possible, be specific about what changes are acceptable. Some contracts include provisions stating that a size reduction of more than 5% allows the buyer to withdraw. You should also limit the developer’s ability to make changes at their discretion. While some modifications may be necessary due to council or regulatory requirements, others may be made purely for financial gain. Reviewing these terms carefully can help prevent unwanted surprises down the track.

For most residential building projects above a certain value, Home Warranty Insurance provides protection in case of defects or incomplete work. However, there are key exemptions—owner-builders and multi-storey developments are often not covered. Before committing to an off-the-plan purchase, confirm whether warranty insurance applies and what avenues of recourse are available if defects or structural issues arise after settlement. Knowing your rights in advance can help you avoid unexpected complications.

Many off-the-plan contracts require buyers to settle the purchase even if minor defects are present. The terms surrounding defect rectifications can vary widely, but in most cases, the vendor provides a warranty to fix issues within a set timeframe after settlement. It’s advisable to negotiate the longest possible warranty period, as defects may not become apparent immediately. Warranty periods typically range from 30 to 90 days, with longer timeframes offering better protection. Be wary of contracts that limit you to submitting a defect list only once, as additional issues may surface after the initial inspection. Reviewing these clauses carefully with your solicitor can help ensure you have the right protections in place.

Disputes can arise in off-the-plan purchases, particularly over issues like substitutions of fixtures or variations to the final build. Including informal dispute resolution clauses in the contract can provide a practical alternative to costly and time-consuming litigation. It is often in the best interests of both parties to agree on a process where an independent third party can assess disputes and issue binding decisions. This approach can help resolve disagreements efficiently while avoiding the uncertainty of legal proceedings. Reviewing these provisions with a solicitor before signing can help safeguard your rights if a dispute arises.

Many off-the-plan contracts include provisions requiring buyers to cover certain costs incurred by the vendor. While standard adjustments for Council rates, water rates, and insurance are reasonable, some contracts go further, attempting to pass on additional expenses such as Land Tax. Depending on your property ownership status, these charges may be unfair, as they shift the vendor’s tax liabilities onto the purchaser—costs that would not otherwise apply. Before signing, it’s important to review these clauses carefully and seek legal advice to determine whether the proposed adjustments are reasonable.

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When buying off-the-plan, understanding the fine print is essential. At Kells, we provide a fixed-fee service, so you get the legal advice you need without worrying about surprise costs.

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Our Sydney conveyancing team is led by a NSW Law Society Accredited Specialist in Property Law and supported by a skilled group of lawyers, licensed conveyancers, paralegals, and administrative staff.

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Thinking about purchasing off-the-plan? Before signing a contract, it’s essential to understand the potential risks and legal implications involved. Off-the-plan purchases come with unique considerations, from contractual terms to developer obligations and settlement conditions.

At Kells, our off-the-plan conveyancing team in Sydney provides comprehensive legal advice to help protect your investment. We review contracts, identify potential pitfalls, and guide you through your rights and obligations to help you make a fully informed decision before committing to your purchase.

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How Can Our Sydney Off-The-Plan Conveyancing Experts Help?

Purchasing off-the-plan can be an attractive option due to potential savings and the appeal of modern designs and a hassle-free buying process. However, these transactions come with some legal considerations, and without the right advice, buyers may face unexpected risks, contract restrictions, or financial complications.

At Kells, our off-the-plan conveyancing specialists in Sydney can conduct a thorough review of your contract to identify any clauses that could put you at a disadvantage. We negotiate terms that protect your interests so that you are fully aware of your rights and obligations before committing to the purchase.

Off-the-plan contracts are often lengthy and heavily favour the developer. Key issues can include unexpected variations to the final build, extended settlement periods, hidden costs, and unclear warranties. Our conveyancing team carefully examines these aspects and provides sound advice to help you make an informed decision about the purchase.

Below are some of the key factors we review and discuss with clients before they proceed with an off-the-plan purchase:

Check up on both the builder and developer

Before committing to an off-the-plan purchase, it’s important to investigate the developer’s reputation. Review their past projects, inspect the quality of their finishes, and speak with previous buyers to gauge their experience, particularly regarding defect rectifications. Checking older developments is also recommended, as some issues take time to appear.

Keep in mind that when you sign an off-the-plan contract, you are dealing with a developer who has the right to appoint or replace the builder. Just because one project was completed to a high standard does not guarantee that the same builder will be used for future developments. Additionally, many off-the-plan contracts allow the developer to assign their rights, meaning that the party ultimately responsible for construction may not be the same entity you initially researched or signed with.
Make sure the price is right

New developments often come with a premium price tag. Rather than focusing solely on advertised fixtures and finishes, compare similar properties in the area and evaluate the price based on a square meter basis. This provides a more accurate measure of value. Seeking professional advice can also help you make an informed decision before committing to a purchase.
How are you going to pay the purchase price on settlement?
Once contracts are exchanged and any cooling-off period has passed (if applicable), they become legally binding. If you are unable to secure finance, you are still obligated to complete the purchase. This can be a challenge, as lenders generally do not provide unconditional loan approval until construction or registration is finalised. Several factors could affect your ability to secure finance when settlement is due, including:
- Changes to your financial situation
- Banking lending criteria
- Valuations
- Settlement date
What are you buying?

Before committing to an off-the-plan purchase, be certain about what is included in the property. Marketing materials and advertisements can be misleading, and contracts often exclude any pre-contractual representations. The final product may differ from what was initially advertised.

To avoid misunderstandings, specify all fixtures and finishes in the contract. If you expect a particular brand or model of appliances, request that these details be explicitly included. Generic terms like "European appliances" provide no real assurance of quality or specific inclusions. Reviewing these details with your solicitor can help prevent disappointment and disputes down the track.

Variations

Most off-the-plan contracts include clauses that allow the developer to alter the original plans. The extent of these changes can vary significantly, making it important to have a solicitor review the terms before signing. Some contracts permit buyers to withdraw if changes go beyond minor modifications, while others only allow termination if the variation substantially reduces the property’s value.

It’s also important to understand your rights if changes occur. Many contracts only give buyers the option to rescind, rather than seek a price reduction. This can be a difficult choice, especially if property values have risen since signing, leaving limited alternatives at the same price point.

Where possible, be specific about what changes are acceptable. Some contracts include provisions stating that a size reduction of more than 5% allows the buyer to withdraw. You should also limit the developer’s ability to make changes at their discretion. While some modifications may be necessary due to council or regulatory requirements, others may be made purely for financial gain. Reviewing these terms carefully can help prevent unwanted surprises down the track.
Warranty insurance

For most residential building projects above a certain value, Home Warranty Insurance provides protection in case of defects or incomplete work. However, there are key exemptions—owner-builders and multi-storey developments are often not covered.

Before committing to an off-the-plan purchase, confirm whether warranty insurance applies and what avenues of recourse are available if defects or structural issues arise after settlement. Knowing your rights in advance can help you avoid unexpected complications.
Defects

Many off-the-plan contracts require buyers to settle the purchase even if minor defects are present. The terms surrounding defect rectifications can vary widely, but in most cases, the vendor provides a warranty to fix issues within a set timeframe after settlement.

It’s advisable to negotiate the longest possible warranty period, as defects may not become apparent immediately. Warranty periods typically range from 30 to 90 days, with longer timeframes offering better protection. Be wary of contracts that limit you to submitting a defect list only once, as additional issues may surface after the initial inspection. Reviewing these clauses carefully with your solicitor can help ensure you have the right protections in place.
Dispute resolution

Disputes can arise in off-the-plan purchases, particularly over issues like substitutions of fixtures or variations to the final build. Including informal dispute resolution clauses in the contract can provide a practical alternative to costly and time-consuming litigation.

It is often in the best interests of both parties to agree on a process where an independent third party can assess disputes and issue binding decisions. This approach can help resolve disagreements efficiently while avoiding the uncertainty of legal proceedings. Reviewing these provisions with a solicitor before signing can help safeguard your rights if a dispute arises.

Adjustments

Many off-the-plan contracts include provisions requiring buyers to cover certain costs incurred by the vendor. While standard adjustments for Council rates, water rates, and insurance are reasonable, some contracts go further, attempting to pass on additional expenses such as Land Tax.

Depending on your property ownership status, these charges may be unfair, as they shift the vendor’s tax liabilities onto the purchaser—costs that would not otherwise apply. Before signing, it’s important to review these clauses carefully and seek legal advice to determine whether the proposed adjustments are reasonable.

Other considerations

Off-the-plan contracts contain numerous legal provisions beyond the key issues discussed. Factors such as GST, notice periods, by-laws, essential services, and warranties can all impact your rights and obligations as a buyer. These details may seem minor but can have significant consequences down the track.

Purchasing property is a major financial and legal commitment, and without the right advice, hidden risks can arise. Seeking guidance from a solicitor with off-the-plan conveyancing experience is essential to protecting your interests.

At Kells, our off-the-plan conveyancing specialists in Sydney are here to guide you through the process. We can provide the legal support you need as you move toward property ownership.

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Get Expert Off-The-Plan Conveyancing Advice in Sydney

Buying off-the-plan comes with unique legal considerations, and it’s important to get the right advice before signing a contract. If you have questions or need expert guidance, contact us today—our Sydney off-the-plan conveyancing team is ready to assist.

Call (02) 9233 7411

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