Purchasing a property off-the-plan can be an exciting venture, offering the promise of a brand-new home tailored to your preferences. However, it also comes with its own set of challenges and risks. In New Zealand, off-the-plan sale and purchase agreements are common, but it is crucial to approach them with caution and due diligence. Here are some key points to consider: 

1. Understanding Off-the-Plan Purchases 

Off-the-plan purchases involve buying property that are not yet built. This means you are committing to a contract based on plans and specifications rather than a physical property. While this can offer benefits such as securing a property at today's prices and having input into the design, it also carries risks related to construction delays, changes in market conditions, and potential discrepancies between the plans and the finished product. 

2. The Importance of a Thorough Agreement 

The sale and purchase agreement is a legally binding document that outlines the terms and conditions of the purchase. It is essential to ensure that this agreement is comprehensive and clearly defines all aspects of the transaction, including the timeline for construction, payment schedules, and what happens if there are delays or changes to the project. 

3. Key Clauses to Look Out For 

When reviewing the agreement, pay close attention to the following clauses: 

• Sunset Clause: This clause sets a deadline for the completion of the project. If the developer fails to complete the property by the date specified in this clause, you may have the option to cancel the contract and get your deposit back. 
• Variations Clause: This clause allows the developer to make changes to the plans and specifications. Ensure that any variations are clearly defined, and communicated to you, and that you have the right to approve significant changes. 
• Defects Liability Period: This period allows you to report any defects or issues with the property after completion. Make sure the agreement specifies the length of this period and the process for addressing defects. 

4. The Role of a Good Lawyer 

One of the most critical steps in purchasing off-the-plans property is engaging a competent and experienced lawyer. A good lawyer will help you: 

• Review the Agreement: They will meticulously review the sales and purchase agreement to help you understand the legal jargon, ensure that your interests are protected, and that there are no unfavourable terms.  
• Conduct Due Diligence: They will check the developer's track record, the project's compliance with local regulations, and any potential legal issues. 
• Negotiate Terms: If necessary, your lawyer can negotiate better terms on your behalf, such as extending the sunset clause or clarifying the variations clause. 
• Provide Ongoing Support: Throughout the construction process, your lawyer can provide advice and support, ensuring that any issues are promptly addressed. 

5. Final Thoughts 

Purchasing off-the-plan property can be a rewarding experience, but it requires careful planning and consideration. By understanding the key aspects of the sales and purchase agreement and ensuring you have a skilled lawyer by your side, you can navigate the process with confidence and peace of mind.