Burgess Thomson Lawyers

What you need to know about Off-The-Plan contracts

Buying Property Off The Plan

No doubt, if you have ever looked at purchasing property, you’ve come across the option of buying ‘off-the-plan’. An off-the-plan purchase is essentially buying a property that is yet to be built.

There are several ways you can purchase property off-the-plan. You could be purchasing a vacant block of land that is part of a larger land development or estate, or it could be a part of a strata complex such as an apartment, townhouse or retail shop that has not yet been constructed.

Buying off-the-plan is attractive because it gives buyers who have a deposit and are in a position to exchange contracts the ability to purchase property at today’s prices, without having to settle until the development is built some time in the future. This creates the possibility of making capital gains during the time the development is being completed, generating instant equity on settlement.

However, buying off-the-plan can be a complicated process and can also come with its pitfalls, so it pays to get expert legal advice from a specialist property lawyer to guide you through the process.

Reviewing the contract

Off-the-plan contracts are usually drafted heavily in favour of the property developer so we review the contract in detail, ensure it contains all the agreed terms, and is in our client’s best interests. We negotiate any special conditions to protect you throughout the transaction. We also coordinate exchange of contracts and advise you on any important aspects of the contract such as the sunset date, checking the schedule of inclusions and finishes is correct, checking the plans and design specifications, and reviewing the defect periods in the contract.

The Sunset clause

The sunset date is the final date the development must be completed before you are able to rescind the contract and get your deposit back. The sunset date can mean that you are committed to the contract for an extended period. The contract may also have extended sunset date clauses which allow the sunset date to be extended further by the developer, often up to two years for any range of reasons at their discretion.

Once contracts are exchanged and you have paid the deposit, you are locked into the contract and cannot get your deposit back for what can sometimes be up to five years… even if the development doesn’t get off the ground. We review these clauses and ensure you are fully aware of the time periods that you are committing to under the contract.

Obligations in the event of death

If you pass away in this period, the contract may also require your estate to settle the purchase, so it is important to ensure that the contract has appropriate provisions that allow your estate to rescind the contract in the event of your death.

This can also be an issue where a couple with joint incomes purchase a property off-the-plan and one partner passes away before the development is completed. Where the other partner is unable to finance the purchase on their own, there is a risk that they may default on the contract and lose their deposit unless there are provisions enabling the contract to be rescinded by the purchaser in the event of death.  We will review these clauses in the contract and negotiate this on your behalf.

Changes to the plans

The contract may also permit the developer to reduce the size of the property without any limitation, substitute the inclusions to those of inferior quality, change the brand of appliances, change the layout of the property, or move car spaces to different locations, and still require you to accept the property and settle. We will negotiate on your behalf to ensure the contract contains appropriate provisions to protect you in these circumstances.

Land Tax

Some off-the-plan contracts also require a land tax adjustment to be paid by purchasers, which is a development cost incurred by the developer during construction. This should be paid by the developer if it is not advertised as payable in addition to the purchase price.

We will ensure the contract has no land tax adjustment payable by you and negotiate this on your behalf.


Settlement of off-the-plan contracts usually takes place within 21 days of the land or strata plan being registered and an occupation certificate for the building being issued. You need to have your finance approved once the development is nearing completion, as there is usually a short timeframe to settle once the development is completed.

It is important to ensure you settle on time as the contract can contain interest rates of up to 10% per annum and require you to pay any legal fees incurred by the vendor for late settlement.


The property lawyers at Burgess Thomson are highly experienced in off-the-plan contracts, which is a specialised area of practice. Get in touch with our team to discuss your off-the-plan property purchase.

More information can be found:
Newcastle Herald, 31 July 2021 ‘Avoid Pitfalls When Buying Off The Plan’
Fair Trading NSW


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