Legal Advice from the Team at ENSURE LEGAL
Buying off-the-plan property in Australia is a popular choice among both investors and homebuyers—especially in growth markets like Queensland, Victoria, and New South Wales. However, off-the-plan contracts contain clauses that differ significantly from standard property purchases.
Having the contract reviewed by an experienced property lawyer before signing is essential to protect your interests.
At ENSURE LEGAL, our team regularly represents clients involved in land developments and off-the-plan purchases. Based on years of experience, we recommend that all buyers seek legal advice before signing—especially to review the following eight key terms:
1. Contract Date
The contract date is the day the agreement is signed by both the buyer and the seller—including any guarantors (which are typically required if the buyer is a company).
⚠️ Note: Guarantors must sign at the same time as the buyer to ensure the contract is enforceable and eligible for financing.
2. Deposit
Deposit requirements differ for off-the-plan contracts:
- Under Queensland law, developers may request a deposit of up to 20% of the purchase price.
- Once the land has been registered (i.e., a title exists), standard property sale contracts cannot require more than 10% as a deposit.
⚠️ Deposits should be held in a solicitor’s trust account until the conditions for release are met.
3. Sunset Clause
The sunset clause sets the latest date by which the developer must complete the build or register the land title. If that deadline passes, either party may terminate the contract (depending on state law).
- In Queensland:
- Properties under a body corporate (e.g., apartments): up to 5.5 years
- Freehold house and land packages: maximum 18 months
⚠️ Each state has different laws around extensions and developer termination rights. Buyers should understand their rights before signing.
4. Disclosure Statement
Under the Land Sales Act and the Body Corporate and Community Management Act, developers must provide a Disclosure Statement to the buyer, outlining:
- Lot layout and architectural plans
- Common property and shared facilities
- Body corporate arrangements
- Land use restrictions and covenants
⚠️ If there are significant changes to the disclosure after signing, the buyer may have a right to terminate within a specific timeframe.
5. Finance Clause
Unlike standard property contracts, off-the-plan contracts often do not contain a finance clause—meaning the buyer cannot withdraw even if financing is declined.
⚠️ Buyers relying on bank finance should obtain legal advice and, where possible, negotiate conditional clauses before signing.
6. Developer Finance & Pre-Sales Clause
These clauses protect the developer by allowing termination of the contract if:
- The developer is unable to secure construction or development finance
- Minimum pre-sales targets (often 60–70% of lots) are not met
⚠️ Buyers should review these terms carefully, including refund rights and notification requirements if the developer exercises these rights.
7. Calling for Settlement
Off-the-plan contracts typically allow the developer to call for settlement once:
- Practical completion is achieved; and
- Title registration is completed.
Buyers will usually be given at least 14 days’ notice to prepare for settlement. During this time, the buyer must:
- Finalise finance and loan documentation
- Pay stamp duty
- Conduct a final inspection and prepare legal documents
8. Settlement Date
The settlement date is when:
- The seller transfers legal title to the buyer; and
- The buyer pays the remaining balance of the purchase price (usually with bank finance).
⚠️ If the buyer is not ready to settle on time, penalties may apply—including daily interest or even termination of the contract and forfeiture of the deposit.
Final Thoughts: Legal Review Is the First Step to a Safe Off-the-Plan Purchase
Off-the-plan contracts are complex and carry unique risks. Whether you’re a first-home buyer, upgrader, or investor, you should always have a lawyer review your contract before signing to ensure you understand your obligations and rights.
📞 The team at ENSURE LEGAL, based in Brisbane, has extensive experience advising local and international clients on off-the-plan purchases. We provide clear, practical, and proactive legal support to help you buy with confidence and avoid unnecessary risks.
