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Understanding Off-Plan Housing Contracts. – Frenet Capital Investments LTD

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Understanding Off-plan contacts

Buyer: I(client/investor) have my personal lawyer and the developer of the Off-plan housing project has their Lawyer too, there is a contract and I commit cash to the developer. In case the developer does not deliver, What should I do as the client/investor?

Most if not all contracts on off-plan housing projects always tend to lean in favour of the developer more than the buyer.

For Example: When I Enter an Agreement with the developer, there is always a termination clause where if you feel one party is not delivering, you can terminate the contract. In this case keenly looking at the termination clause favours the developer that is when they delay, you as the client will have the burden of termination.

If you communicate to developer with intention to terminate:

The Nitty Gritty of off-plan Contracts.
  1. The developer will tell you they wont give you your money immediately, look for a buyer to replace you.(so it is you to get a buyer to buy the property not them)
  2. We(developer) have received your termination notice, but won’t pay until we complete.(you got no idea when the completion will be done that is 5, 10, 15 Years, basically you at their mercy)

So it is important to look at the terms and conditions of the contract. It is important to engage a lawyer and if it does not favour you as the buyer, you will be advised to renegotiate (propose changes that will favour you).

Next Does having a Big Name in real Estate mean you will always deliver offplan projects?

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