Can a developer change the design in off the plan properties?

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McCartney
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Joined: Thu Sep 13, 2018 2:14 pm

Can a developer change the design in off the plan properties?

Postby McCartney » Thu Sep 13, 2018 2:39 pm

Hi Home Loan Experts.

I’m buying an off the plan unit in Penrith and paid a 5% deposit to the builder in August 2016. The construction is almost done but I went to check out the property, the dimensions look a lot different to what I signed in the Contract of Sale.

They told me that the property is no longer 80m2 but 72m2. The layout of the rooms and living areas is also different from the unit plans what I was shown earlier. I'm missing an entire closet and living room will no longer accommodate the lounge set we bought! Can I raise this issue with the developer?

Thank you in advance.

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Otto Dargan
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Re: Can a developer change the design in off the plan properties?

Postby Otto Dargan » Thu Sep 13, 2018 3:29 pm

Hi McCartney, Welcome to the forum.

In case of off the plan properties, developers reserve the right to make variations to the design and, in most cases, these properties come with a “tolerance percentage” for variations, such as 5 to 10 per cent.

Most off the plan contracts provide for changes concerning size, area, fixtures and fittings etc. Sometimes, the changes they make are minor and basically for safety reasons or unforeseen problems with the development but the key is that these changes should not "materially prejudice" or affect you as the buyer.

If you think the finished output is significantly different than what you signed up for, the first you should do is to try and negotiate with the developer. If they push back, it may be worth getting advice from a solicitor.

The last thing you want to do is go down a costly litigation route. However, if a solicitor believes that you have a good chance, it may be worth considering.

Please enquire online or call us on 1300 889 743 and explain your situation so we can help you get approved for a home loan.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

McCartney
Posts: 3
Joined: Thu Sep 13, 2018 2:14 pm

Re: Can a developer change the design in off the plan properties?

Postby McCartney » Thu Sep 13, 2018 5:03 pm

I’ll speak to my conveyancer about this. Moreover, the rules have been changing regularly for off the plan properties. How much can I borrow for the off the plan property?

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Otto Dargan
Mortgage Specialist
Posts: 7021
Joined: Sat Sep 06, 2008 5:55 pm
Location: Sydney, Australia
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Re: Can a developer change the design in off the plan properties?

Postby Otto Dargan » Thu Sep 13, 2018 6:19 pm

Hi McCartney,

Yes, it’s true that banks have tightened the lending regulations due to over-supply of the off the plan properties in the market. With this loan, you may be able to borrow:
  • Up to 105% of the property value with a guarantor.
  • Up to 95% of the property value for the first home buyer (some restrictions may apply).
  • Up to 95% of the property value for investment property.
  • Up to 80% of the property value for a low doc.
Competitive professional package and basic loan discounts may also be available on a case by case basis.

You may be able to receive off the plan home loan if you want to buy a unit which is yet to be constructed completely. Most lenders may issue a pre-approval when you sign the contract and they may also reassess your loan application during the settlement of the property.

Our mortgage brokers specialise in off the plan mortgages and can negotiate with the lenders on your behalf. Call us on 1300 889 743 or by completing our free online assessment form.

Cheers,
Otto Dargan
Mortgage Broker
P | 1300 889 743
Home Loan Experts

McCartney
Posts: 3
Joined: Thu Sep 13, 2018 2:14 pm

Re: Can a developer change the design in off the plan properties?

Postby McCartney » Thu Sep 13, 2018 8:02 pm

Hi Otto, thanks for the information. I’ll discuss this with my solicitor and discuss with you further.


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