Should I Buy an Off-the-Plan Strata Unit UNSW?

KEY TAKE-OUTS:

• Buying an off-the-plan strata unit means committing before the building and strata scheme exist.

• Strata fees, by-laws, layouts, and completion dates may change between contract and settlement.

• Buyers won’t have access to a strata inspection report until the strata plan is registered.

• Proper legal review helps manage risk and avoid unexpected costs or restrictions.

---

What is an “Off-the-Plan” Strata purchase?

Strata (also called strata title) is a form of property ownership that applies mainly to apartments, townhouses, and units within a larger complex or building. When you buy a strata title, you own your unit or lot, while also sharing ownership and responsibility for common property with other owners in the same development.

An off-the-plan purchase occurs when you enter a contract to purchase a residential property that has not yet been constructed. The agreement is based on the plans, drawings, and specifications outlined in the Contract for Sale.

Buying off the plan offers a range of advantages, but it’s important to understand the potential drawbacks before signing a contract for an off-the-plan strata unit.

 

1. Strata Fees are only a projection

When you buy off the plan, the property and the strata scheme don’t yet exist, so the fees you’re shown are projections based on the developer’s estimates. These estimates are usually outlined in the strata budget provided with the contract of sale.

Things to keep in mind:

• Developers often aim to keep projected fees appealing to buyers. So initial estimates may be lower than actual costs. It is important to keep this in mind when budgeting

• Once the building is complete and the Owners Corporation is appointed, the true cost may rise to reflect the actual maintenance and service levels required. The more facilities you have e.g. a pool or rooftop garden etc, the higher the fees for ongoing maintenance

 

2. Everything is in draft and may change

Like any off the plan purchase, things may change. Below are a few to keep in mind:

 

Changes to your plans:

The location of your car space and storage area may differ from the plans once the strata plan is registered. The finishes within your unit may also vary, and the development’s facilities could differ from those originally proposed. The developer should notify you if there are any changes which might be detrimental to your purchase.

 

Strata By-Laws Could Change

Strata by-laws are the set of rules that regulate how owners and residents must behave within a strata scheme. They include rules around moving, keeping pets and renovations to your unit etc.

When you purchase off the plan, the by-laws are proposed by the developer and included in the contract. These proposed by-laws form part of the initial strata plan that will be registered once the building is complete. The registered By-Laws could differ from what is proposed in the contract. Make sure you read and understand the registered By-Laws.

 

Change to your sunset date

Your sunset date is the contractual deadline by which the developer must complete the project and register the plan of subdivision or strata title. The sunset date will be in your contract and there could also be a special condition which allows to the Vendor to extend the sunset date if needed. Your conveyancer will be able to advise you on this.

Keep in mind that the development could finish earlier or later than the sunset date.

 

3. No Strata Inspection Report

What Is a Strata Inspection Report?

A strata inspection report is an independent review of the records held by the Owners Corporation. The report provides a snapshot of the current financial position of the strata scheme, minutes of meetings and any disputes, building maintenance history and upcoming works and details of levies, budgets, and special levies.

Until registration takes place, formal strata records will not be available for review. This means you won’t have access to information about the building’s condition, including any minor or major defects or potential issues, before entering the contract.

 

Summary

Buying a property off the plan can be a great way to secure a new home or investment at today’s prices. However, be prepared for the changes which could happen!

 

💬 Thinking about buying an off-the-plan strata unit?
Because so much can change between signing and settlement; including strata fees, by-laws, layouts, and completion dates,  it’s essential to get legal advice before you commit.

The experienced Property & Conveyancing team at Coutts Lawyers & Conveyancers can review your contract, explain the risks, and help ensure you understand exactly what you’re buying before you sign.

Contact us on 1300 COUTTS to speak with a property law expert today.