FROM THE BLOG

Buying property off the plan can be an exciting venture, but circumstances can change, and sometimes you may find yourself in a situation where you need to exit the contract. While it’s not always straightforward, it is possible to terminate an off-the-plan contract under specific circumstances. In this blog post, we’ll explore the steps and considerations for getting out of an off-the-plan contract in Victoria.

1. Understand Your Cooling-Off Period

In Victoria, off-the-plan buyers are generally entitled to a cooling-off period of three business days after signing the contract. During this time, you have the right to cancel the contract without providing a reason. However, you will forfeit a small portion of the deposit (usually 0.2% of the purchase price) as a penalty.

2. Check for Sunset Clauses

Off-the-plan contracts include a “sunset clause” that specifies the maximum allowable time for the developer to complete construction. If the sunset date has passed, and the developer has not fulfilled their obligations, you may have the right to terminate the contract. Consult your contract and seek legal advice to understand your options.

3. Review Your Contract’s Conditions

Examine the conditions outlined in your off-the-plan contract carefully. Contracts may contain clauses that allow you to terminate under specific circumstances, such as material changes to the property, delays, or other breaches by the developer. Seek advice from an experienced conveyancer to assess whether any of these conditions apply in your situation.

4. Negotiate with the Developer

If you wish to exit the contract due to unforeseen circumstances or personal reasons, it may be worth attempting to negotiate with the developer. They might be willing to agree to a contract termination or offer alternatives, such as transferring the contract to another buyer. However, it’s essential to document any agreements in writing to protect your interests.

5. Seek Legal Advice

Before taking any steps to terminate the contract, it’s highly advisable to consult with an experienced conveyancer who specialises in property law. They can provide legal advice tailored to your specific circumstances and help you navigate the complexities of contract termination.

6. Be Prepared for Financial Implications

Exiting an off-the-plan contract may have financial consequences. You may lose your deposit or be required to pay penalties outlined in the contract. Ensure you understand these potential costs before making a decision.

7. Comply with Notification Procedures

If you decide to proceed with contract termination, make sure to follow the notification procedures specified in your contract. This often involves providing written notice to the developer, and complying with any relevant timelines.

8. Consider Reselling the Contract

In some cases, you may be able to sell your off-the-plan contract to another buyer, particularly if the property has appreciated in value since you signed the contract. However, this process can also be complex and may require the developer’s consent.

Conclusion

Exiting an off-the-plan contract in Victoria, is possible under certain circumstances, but it’s not without its challenges and potential financial implications. It’s crucial to carefully review your contract, seek legal advice, and explore negotiation options before making a decision. Each case is unique, so consult with a legal professional to determine the best course of action based on your specific situation.

Further information on buying property off the plan can be obtained from the State Revenue Office website here: https://www.consumer.vic.gov.au/housing/buying-and-selling-property/buying-property/buying-off-the-plan or by contacting ConveyancingX.