When buying off-the-plan goes wrong
BUYING off-the-plan has long been a popular option for Aussie homebuyers - but what happens when things don't go to plan?
Nine News recently spoke to several Sydney homeowners who are now stuck with "dodgy" townhouses after buying them off-the-plan.
Alyssa Lee, who is one of several residents who purchased a home inside a new Telopea complex, said the home she ended up with was different to what she had seen on the floorplans.
Ms Lee and her partner Leon Sidik are now frustrated by their bathroom, with their toilet almost touching the shower wall.
They are also unhappy with the position of their bathroom sink, which the couple claim was supposed to be installed under a window.
Neighbour Carmel Bennett is dissatisfied with her kitchen, and was told that the floorplans she'd seen before buying were actually only for marketing purposes and not a true reflection of the new home.
"There's nothing I can do about it now, I'm stuck with it - unless I want to rip the kitchen out and put a whole new kitchen in," she said.
"If you are buying from a plan and it's what you expect, I think you should get exactly what's on the plan - within reason."
However, Property Mavens founder Miriam Sandkuhler, who has written extensively about the pitfalls of off-the-plan sales, said buying off-the-plan was risky, and a conveyancer who specialised in off-the-plan properties was essential.
"Most people don't understand that buying off-the-plan is one of the highest-risk strategies you can do. Everyone sells the benefits ... but independent, unbiased advice is really important," she said.
"Not all off-the-plan properties are bad, but all off-the-plan properties require due diligence before you sign that dotted line of the contract.
"Buying property off-the-plan is a very high-risk strategy because so many things can go wrong that the average person doesn't know about, for example, there can be tricks and complexities in the contract of sale that can see buyers become unstuck.
"Builders can go bust, developers can go bust, both builders and developers can be inexperienced, the developer's finance could fall over and there's the potential that the whole project might never get off the ground."
Ms Sandkuhler warned buyers to do their research before signing the contract.
"Most investors buy-off-the plan because they're convinced they will save on stamp duty and tax relief, but a poor performing property with a tax benefit or stamp duty savings is still ultimately a poor performing property, and you'll lose money in the long run," she said.
"Before you sign, get a conveyancer who specialises in off-the-plan to review the contract and then any tricks, complexities or out clauses should come to light. If you buy without a conveyancer then it's a case of buyer beware."
Strata Community Australia president Scott Bellerby said buying off-the-plan gave buyers a sense of excitement, the opportunity to live in a brand new place and the ability to be part of a new, evolving community, but he also warned of several dangers.
He warned buyers to be wary of "delays in construction, a recalcitrant developer and builder that does not adequately address building faults and a strata manager that is not experienced in bringing online new schemes".
He said NSW had just adopted a number of safeguards in legislation which helped protect purchasers buying off-the-plan.