Off the Plan Property Disputes & Resolution NSW
13 January 2025 in Property Dispute Lawyers | 6 min read | skip to FAQsAn off the plan property involves the purchase of a property that is planned to be built, but not yet built. This article discusses these disputes and how to resolve them.
Common Off the Plan Property Disputes
- Construction Delays and Sunset Clauses. This dispute occurs when a building project takes longer than expected to complete, often resulting in financial losses by the purchaser. Sunset clauses allow either party to terminate a contract when the building doesn’t reach practical completion by the sunset date. This may seem fair, however in a market where property prices are increasing this creates an incentive for the developer to delay the project and and terminate the contract with the purchaser.
- Building Defects. Another common issue which is sometimes not noticed until the property is inhabited and defects and poor workmanship come to light.
- Changes to Plans or Specifications. This includes the use of inferior materials or design changes not specified in the contract. A developer or builder has the right to modify the design of a building within certain parameters. These parameters should be clearly defined in the contract and understood by the buyer.
- Contractual Disagreements. This includes conflicts over contract terms such as settlement dates.
How to avoid Off the Plan Property Disputes
Seek Legal Advice prior to signing
An experienced property lawyer can explain the advantages and disadvantages of buying an off the plan property. They can explain the legal rights and obligations conferred by the contract for purchase and identify whether there are additional clauses, terms and conditions of concern. They will also discuss important considerations such as:
- What is the cooling off period
- Is there a sunset clause and what are the implications of this
- What are the parameters for design modification
- Can costs be adjusted
- Are there clauses for dispute resolution
- What are the consequences of withdrawing from the contract
The property dispute lawyers at Brander Smith McKnight law firm Sydney can negotiate the terms of the contract to avoid future disputes and protect your interests.
What to do if a Property Dispute occurs
Engage a Property Lawyer to review the Contract
It is advisable to seek legal advice from an experienced property dispute lawyer. Experienced property dispute lawyers can suggest legal remedies such as enforcing contractual rights and obligations, injunctions, specific rectification and compensatory damages. Property dispute lawyers can review statutory warranties that compel builders to carry out building work to a proper level of care and skill and commence proceedings for any breaches. Many statutory warranties are defined in section 18B of Home Building Act 1989 (NSW).
Employ Alternative Dispute Resolution methods
Alternative Dispute Resolution are methods used to solve a dispute without formal litigation. Litigation is the process of resolving a dispute in court. Some of these methods can be performed by the individuals in the dispute and some are better handled by property lawyers. Examples of alternative dispute resolution techniques are :
- Informal Agreement: This is where the parties to an off the plan property dispute attempt to resolve the dispute amongst themselves by discussing the relevant issues with each other.
- Negotiation: This is the favoured approach by BSM lawyers, the overwhelming majority of our off the plan property disputes are settled using this technique, saving you time, money and stress.
- Mediation: This is where an independent mediator helps disputing parties settle their dispute amongst themselves. This is done by the mediator facilitating discussion between the parties through which the parties pursue a mutually beneficial solution. Mediation is confidential and mediators do not take sides or make decisions in relation to your dispute. Mediations normally involve the mediator and respective lawyers and their clients. It is a cost and time effective alternative to litigation.
- Conciliation: This uses an independent and impartial person called a conciliator. Unlike a mediator, a conciliator may play an advisory role on the content and resolution of the dispute. Similar to mediation, it is voluntary, confidential and the conciliator can not make a binding decision. Conciliations normally involve the conciliator and respective lawyers and their clients.
- Arbitration: This is a more structured process allows disputing parties to have their dispute decided by an independent, neutral decision maker, called an arbitrator. In arbitration, the disputing parties put forward arguments and evidence that the arbitrator will assess when making a decision in relation to the dispute. The process is private and subject to the parties agreement, can be confidential. It is the most formal alternative to litigation. The parties can enter into an arbitration contract, called an award, which is legally binding and enforceable.
NSW Fair Trading
NSW Fair Trading provides a platform for resolving disputes related to off the plan property purchases. This is a free service that can be accessed by individuals without involving a lawyer. NSW Fair Trading can investigate and provide information and mediation services. Unfortunately they have limited enforcement powers.
Litigation
Litigation refers to the process of resolving a dispute in court. During litigation, both parties to the dispute will argue their case before an impartial judge. The judge will determine how to resolve the dispute based on hearing the evidence of the case and the arguments of either party. The decisions made by the judge are legally binding and enforceable. The lawyers at Brander Smith McKnight have the experience to effectively advocate for you in court to save you the additional expense of a barrister. Even during litigation, our lawyers remain committed to resolving your dispute as early as possible and will continue ongoing negotiation, making formal offers of compromise and interlocutory applications to court. Interlocutory applications are applications made during the proceedings to gain a tactical advantage.
How can BSM Law assist you?
Brander Smith McKnight’s Sydney lawyers have extensive experience and expertise with property disputes. Our property dispute lawyers resolve the vast majority of property disputes without the need for litigation. We have the expertise to achieve excellent results using alternative dispute resolution. If litigation is required, our lawyers have outstanding advocacy experience and experience in all tribunals and courts, including the Supreme Court where off the plan property disputes are litigated. Brander Smith McKnight property dispute lawyers provide a free 20-minute consultation.
Call us to arrange a free 20 minute no obligation consultation that includes case evaluation and cost estimate.
FAQs
What is a cooling off period?
In NSW, a cooling off period is a period of time that commences after a buyer enters into a contract for the sale of certain kinds of property. During the cooling off period the purchaser can decide to rescind their contract for the purchase of an off the plan property. The length of a cooling off period is set under law by default but a shorter or longer cooling off period can be negotiated in your contract for the sale of property. BSM Sydney lawyers can negotiate for you.
What is a disclosure statement?
A disclosure statement includes various documents and important information which must be provided by a vendor to a purchaser of an off the plan property (see section 66ZM Conveyancing Act 1919 (NSW)).
Are there time limits that apply to statutory warranties?
Yes, the Home Building Act 1989 (NSW) provides that a party can commence proceedings for the breach of a statutory warranty that results in a major defect within 6 years from the completion of the work to which it relates. In the case of minor defects, proceedings must be commenced within 2 years of the completion of the work to which it relates. For more information, see our article on statutory warranties.
What is considered a major building defect?
Major defects are legally defined in section 18E(4) of the Home Building Act 1989 (NSW). In general terms, a major defect refers to a defect in a major element of a building that causes or is likely to cause:
- An inability to inhabit or use the building
- The destruction of the building or part of the building
- A threat of collapse of the building or part of the building.
BSM Lawyer Sydney have conveniently located offices in Sydney CBD, Sutherland, Parramatta, Shellharbour and Wollongong.
About the Author
Cooper AgnewBachelor of Laws I Bachelor of Economics & Finance with Distinction I Graduate Diploma of Legal Practice I Admitted to the Supreme Court of NSW & the High Court of Australia
View profileCooper Agnew is a commercially minded lawyer who graduated from the University of Wollongong with a Bachelor of Laws and Bachelor of Economics and Finance with Distinction. Cooper has experience working across corporate and commercial matters, civil disputes in an advisory capacity through to litigation. His dual qualification provides him with a strong foundation in both legal principles and understanding of complex financial concepts, allowing for a comprehensive understanding of a range of commercial and corporate matters. Cooper is recognised for his strong communication skills, meticulous attention to detail and proactive approach to resolving legal challenges. He has knowledge of and experience with the legislation relating to off the plan property disputes.
