Buying off the plan

You can choose to buy a property ‘off the plan’. This means entering into a contract before:

  • the building is out of the construction phase
  • the title to the lot has been created.

When buying a property off the plan, you may be able to:

  • have input into certain design aspects of the home
  • save money on the purchase price.

Make sure you’re aware of the risks when you buy off the plan. These include:

  • not being able to see the final result until after you’ve already bought the property
  • unexpected delays in the building process
  • changes in the market price of property between when you enter into a contract and when the contract settles
  • clauses in the contract that allow for it to be cancelled.

Disclosure statement

The seller must also give you a disclosure statement that:

  • gives their name and address
  • identifies you as the buyer (by name and address)
  • clearly identifies the land or unit you are buying
  • puts in writing their claims or promises about a future certificate of title.

To identify a block of land ('the proposed lot'), the developer must disclose:

  • the proposed number of the lot
  • the total area of the lot
  • the proposed orientation of the lot (by referring to north).

The disclosure statement will need to include a section that:

  • is completed by a cadastral surveyor
  • explains the proposed state of the lot at the time you will take ownership
  • give details of earth-moving or other work that the developer intends to do to the land.

You must sign and date the disclosure statement to confirm that you understand it.


A contract is binding once you and the developer have both signed it. However, there are some limited situations in which you or the seller can back out of a contract.

When entering into an ‘off the plan’ contract, you should always get legal advice before you sign or pay a deposit so you understand the terms of the contract and what they can mean for you.

Getting legal advice is just as important as getting financial advice and organising a mortgage.

‘Material prejudice’

You have a right to back out of a contract if:

  • you find out that there is a change to the initial disclosure about the state of the land, and
  • the change will cause a significant disadvantage (known as material prejudice).

This could be (whichever is sooner):

  • within 30 days of receiving the notification
  • before the title of ownership transfers to the buyer.

In this approach:

  • the developer must notify you of a change in any detail that was set out in the disclosure statement
  • you must show that the change will be a significant disadvantage (such as a significantly reduced size)
  • the Courts have set a precedent to decide if a disadvantage is a material prejudice.

Failure to settle

The Land Sales Act 1984 requires the seller of a proposed lot to settle the contract of sale no later than 18 months after you enter into the contract.

If the seller fails to settle the contract within 18 months, other than because you have defaulted, you may terminate the contract by written notice given to the seller before the contract is settled.

The Act does not give sellers a statutory right to terminate an ‘off the plan’ sales contract after 18 months. However, they may build such a right into the sales contract through ‘sunset clauses’.

If you are concerned about being impacted by the termination of an existing sales contract, you should seek legal advice about the particular terms of your contract and any legal remedies that may be available to you.

Sunset clauses

A sunset clause puts conditions and limits on the contract. Depending on the wording, this could let you, the builder or the developer cancel the contract.

Make sure you read and understand what your contract says about:

  • when the sunset clause can be activated
  • why it can be activated
  • what happens when it does.