Off-the-plan sales are popular in the Queensland real estate market at the moment because they offer buyers the opportunity to secure properties before they are built, which reduces the purchase price.

This strategy can be appealing, particularly in a rising market, because it allows buyers to lock in a price and potentially benefit from property value appreciation before they have even moved in. When you buy off-the-plan, you also get the benefit of a brand-new home.

However, the excitement of this approach comes with a few challenges and risks, many of which stem from the level of disclosure provided by developers. Find out why disclosure is important and how to protect yourself from a negative experience:

Why Disclosure Matters in Off-the-Plan Sales

The success of an off-the-plan purchase often hinges on the quality and transparency of the information provided by the developer. If you are a buyer, adequate disclosure will ensure you are fully informed about what you are committing to, reducing the likelihood of unpleasant surprises once the property is completed.

In contrast, inadequate or misleading disclosure can lead to a range of issues that may result in financial loss, legal disputes and significant stress.

Here are some ways a lack of disclosure can trip you up:

Uncertain completion timelines

One of the most common risks associated with off-the-plan sales is the uncertainty surrounding project completion. Real estate developments can be subject to delays due to factors such as construction setbacks, supply chain disruptions or changes in regulations. Even bad weather can set a project back by several weeks.

If you have plans to move into your new property by a certain date, but the project is delayed, you could face additional costs for temporary accommodation or storage. What’s more, if you are planning to rent or sell the property for profit, you could find your investment timeline extended, potentially affecting return on investment.

When a timeline on an off-the-plan sale seems too good to be true, question it or work with a property law specialist from NPR Law to figure out how to raise the issue with the vendor.

Lack of notification regarding material changes

During the construction phase, developers may need to make modifications to the original design, layout or specifications of the property.

While some changes may be minor, others could significantly alter the look, feel, or functionality of the property. There are stories of people showing up to move into their brand new one-bedroom apartment, only to find it has been completed as a studio, with no bedroom walls. This is an extreme case, but without appropriate disclosure, you may not be informed of these changes until the property is completed, at which point it may be too late to address concerns.

Hidden costs and fee structures

One of the most significant financial risks in off-the-plan purchases is the possibility of hidden costs and fees that were not clearly outlined in the initial agreement. These may include additional taxes, levies, strata fees or other charges that only become apparent once the buyer is committed.

Insufficient disclosure regarding these costs can lead to an incomplete understanding of the financial obligations associated with the purchase. If you aren’t unaware of these extra expenses, it will be difficult to manage your budget.

Unknown building quality and potential defects

Another critical area where disclosure is essential is in the construction quality and potential defects of the property. Without adequate information about the materials used, construction standards or the reputation of the builder, you are at risk of investing in a property that may not meet your expectations. Building defects can be costly to repair and may not become apparent until after you have taken possession of the property, which will result in added costs for maintenance and repair. You may even find you have to take legal action to recoup money lost.

Off-the-plan sales: Are you protected?

The importance of disclosure as part of an off-the-plan purchase cannot be overstated. Before you commit, you must have access to transparent and comprehensive information regarding completion timelines, material changes, hidden costs, building quality and legal protections.

Failing to obtain the right disclosure exposes you to pitfalls that can impact your finances and turn what should be a positive experience into a negative one. To mitigate these risks, you need to carefully scrutinise all documentation provided by developers, and consult a property law expert from NPR Law who can help you to safeguard your interests.

Prevention is always better than cure. By enlisting the help of an experienced property lawyer to review your off-the-plan contract, you will reduce the risk of having to endure lengthy legal proceedings in the future.