What is an “off-the-plan” purchase, and how does it differ from a standard purchase?
Buying “off-the-plan” means buying land or an apartment that does not yet exist other than as a drawing on a proposed plan. Imagine a large paddock surrounded by a single fence. The owner would like to divide the land into small lots and sell them off, but he may not have enough money to do this, and he may not be sure that people will want to buy them. To minimise his risk, the landowner can “sell” the blocks first, and then divide them up later. This is done by entering into contracts with potential buyers on the basis that the landowner (vendor) will do his best to sub-divide the land, and if he is successful the sale will be completed. Usually, the vendor has a limited time (from 18 months to 3 years) to have the land sub-divided. If the land cannot be sub-divided within the time specified in the contracts, the contracts can be cancelled, and the purchasers will get their money back. The vendor has plans prepared, showing the paddock divided into smaller lots. Potential purchasers
