Hi all,
i bought an apartment off the plan in April and currently still the construction hasn't started, it was due to start two months ago. I am yet to receive a single update from the selling agent on the progress, and everytime I try to contact them they always say they will call me back but never do. I'm tempted to ring them up and act as a buyer interested in their last two apartments for sale and then try and get some new information regarding the project. The selling agent is a respected seller and has been around for decades in Perth so I doubt they will take my deposit and run, but their service at the moment is terrible as I have yet to hear any news.
does anyone have any advice for me on what I should do or any experience in buying off the plan.
many thanks
Hi CS
It's not uncommon for off the plan property timeframes to change.
It sounds harsh but the REA has locked you into the deal and sounds like he's no longer treating you as a priority. I bet he/she would have been a lot more prompt with returing your calls before you exchanged contracts on the property!
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
thx for the reply,
yes it seems now that i have signed the contract, they have my money and can do what they want.
Hence my inclination to call up and act as a buyer, and then fish out some information on the progress.
It's a pity some agents act in this way – and I've experienced it first hand on a number of occasions.
They forget they operate in a service industry and whilst they may have already sealed the deal – they're still required to uphold a level of customer service….and they're not doing their reputation any favors.
You shouldn't have to pretend to be someone else just to get an update – that's really poor form on their behalf. Hopefully it all works out ok.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
Perils of buying OTP. The agents are not likely to have all the information.
Check your contract and know it backwards.
Hi CS,
Having developed $50 million worth of property I can give you the following information in regards to the sale.
The selling agent isn't the information portal for progress updates on the development as they are 3rd parties that are only as knowledgeable about the development as the developer allows them to be. You have to also consider that if the development is having issues, the developer will send out PR updates only and never tell them the truth about what is really going on. The updates should come from the developer, not the selling agent.
In regards to your deposit, there will be a sunset clause in your contract that will allow you to rescind if the property is not registered for settlement by a certain point in time (usually 2-3 years depending on the size of the project). Your deposit is to be held in the trust account of the selling agent or lawyer of the developer and is under no risk at all of being taken (unless you have agreed to it being released in your contract for sale). If the money is taken or "borrowed" for any reason without your consent, the party(s) responsible for its unauthorised use can potentially go to gaol once the Office of Fair Trade in any state investigates the matter. It is a very serious offense to take money without authorisation from a trust account.
As Freckle said, you need to understand your contract back to front when buying something OTP. Your rights and the responsibilities of the developer will be detailed in there. I know it will be very pro-developer, but there may be a clause regarding release of information related to the project in there (unlikely).
The bottom line is, provided that the property is completed prior to the sunset clause expiration there is probably no obligation for the developer to give you any updates. From a PR perspective they certainly should, but there could be many reasons as to why they won't release information about the project.
Hopefully it works out well for you.
Dave Ward | Geronimo Finance
http://www.geronimofinance.com.au
Email Me | Phone MeProperty Investor, Property Investment Expert & Advisor, Finance Expert & Strategist
Hi thanks for that info it certainly helped. There is a sunset clause but as I signed the contracts back in April I forget off the top of my head, I'll have to go back over the contract, but it is about 2-3 years from memory.
There is also probably a clause or two in the contract relating to delays due to inclement weather. This can actually legally extend the settlement date beyond the sunset clause. In practice, it seems inappropriate to me, as there is no requirement to factor in foreseeable average rainfall. I had an off the plan unit's settlement date extended by every day 2 millimeters of rain fell in Emerald. The standard OTP contract is prepared by the developer's solicitors for the developer, and is naturally weighted heavily in the favor of the developer. You should bear in mind the fact that throughout the duration of your wait for settlement to occur you will have to keep your finances in a state of preparation for the eventual call to settle, and any delays in settlement may inhibit your ability to expand your portfolio by taking on more debt, as further debt may be viewed by the banks as limiting your ability to service the loan you may need to settle your OTP purchase. Two months behind schedule is in itself no cause for alarm, but you should definitely review your contract and consider what the worst case scenario could be. Hopefully it won't come to that, but it's better to have your eyes open and see it coming than it is to get king hit.
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