What does it mean to buy off the plan? Are you aware of the risks associated with purchasing off the plan? You can avoid common mistakes by being aware of the differences between buying off the plan and purchasing an established dwelling.

What does it mean to buy off the plan?

Unlike purchasing a house, a unit or any other established dwelling, when you buy off the plan, there is no finished building for you to walk through or inspect. Whilst there are a number of positives that can result from buying off the plan, such as tax incentives (e.g. stamp duty concessions) and having more time to save for a deposit, there are a number of added risks and complexities that can arise in these transactions.

What are the common risks and complexities in off the plan purchases in comparison to buying a completed dwelling?

1. The property remains unbuilt:

The ultimate risk is that the property you have purchased off the plan is never completed. You may waste time, money and stress on a property which is never built. Often, off the plan Contracts of Sale will contain extensive and complex clauses about the prospective plan of subdivision for the land in question.

Contracts will also specify the terms and conditions as to when, if at all, a developer can cancel construction, hence leaving performance under the contract incomplete. For these reasons, it is always advisable that, prior to entering into an off the plan contract, you should consult a specialist property lawyer who can explain to you what your rights are under a specific contract and advise whether or not it is a contract which you should enter.

2. The developers may complete the property and it is not what you were anticipating: what can you do?

This will be completely dependent on what the contract stipulates. Some off the plan contracts will include room for minor variations to occur, and others will not provide for that flexibility. Often, there are terms included in the contract as to what recourse you will have if the property is not what you had anticipated.

3. The property is partially built and the developer goes into bankruptcy: what are your rights?

This is a common risk that is associated with purchasing properties off the plan, whereby you pay a deposit to the vendor, only for the builder to run out of money. Whether you can claim any of the deposit, or whether you can rely on guarantees will be issues needing legal advice.

Guarantees are often contained within detailed clauses of the contract, which derive from a complex and contentious area of law. You may need to also consult with a lawyer who is expert in bankruptcy, as well as a property lawyer, if this becomes an issue. They can work together to determine your rights and advise you as to your position under your contract.

How can Sharrock Pitman Legal assist?

Overall, there are a number of positive incentives which you can look to take advantage of when purchasing off the plan. Numerous individuals buy off the plan and face no difficulty at all.

However, the potential risks which are involved, even if they do occur infrequently, can be significant.

It is always advisable when considering purchasing any type of real estate to have a lawyer review the contract to advise you of your rights or of any untoward provisions contained in the contract. If you have any queries or concerns, or are contemplating purchasing a property off the plan, feel free to contact Andre Ong (Accredited Specialist in Property Law) to guide you through your property transaction. Call us on 1300 205 506 or complete the form below.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

For further information contact

Shubha Rao

Shubha Rao is a Senior Associate in the Property Law team at Sharrock Pitman Legal.

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What does it mean to buy off the plan? Are you aware of the risks associated with purchasing off the plan? You can avoid common mistakes by being aware of the differences between buying off the plan and purchasing an established dwelling.

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.

You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE:

(03) 8561 3318

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What does it mean to buy off the plan?

What does it mean to buy off the plan? Are you aware of the risks associated with purchasing off the plan? You can avoid common mistakes by being aware of the differences between buying off the plan and purchasing an established dwelling.

What does it mean to buy off the plan?