One of the biggest drawcards of buying off-the-plan property is the fact you’re getting a brand new home, without the worries of repairs, maintenance or renovation costs. However, this isn’t always the case – as you might find in the pre-settlement inspection.
This is the walkthrough you can do when construction’s completed, but before the deal has gone through. For example, you might discover shoddy paintwork in the stairwell, chipped tiles in the bathroom or doors that don’t close in the kitchen.
The good news is that while common defects like these can be annoying, they can be easily rectified by the builder or developer. But be warned. You’ll likely have only a small timeframe to bring it to their attention. That’s because many off-the-plan sale contracts limit the reporting of defects and outstanding work to a fixed period after settlement (as little as 14 days!).
What about more serious defects?
Unfortunately, some defects can be impossible to spot in the walkthrough inspection, only becoming apparent years later in the building’s life. According to University of New South Wales (UNSW) research, the most common defects reported by off-the-plan owners include:
- Internal water leaks
- Cracking to internal or external walls
- Water penetration from outside
- Guttering faults
- Defective roof coverings
- Defective plumbing
The UNSW study said that while some of these defects may have existed during the construction phase, others could have been triggered by faulty workmanship, sub-standard materials or defective design.
What’s more, these defects aren’t just expensive to fix. They can also cause major structural problems.
So, where do you stand if your off-the-plan purchase has serious defects? More importantly, who is responsible for the cost of rectifying them?
In Victoria, a builder has to meet certain obligations and standards when they build a residential building. As such, all off-the-plan contracts include statutory warranties that cover:
- Structural defects – six years from when the building was completed
- Non-structural defects – two years
If there has been a breach of the statutory warranty, the Victorian Building Authority (VBA) can order the builder to fix the problem or pay compensation. In serious cases, the VBA can also impose fines and revoke building licenses.
What should you do if you notice defects?
There is power in numbers. So, if you find a defect in your apartment, notify the body corporate – as others in your building may be facing the same issue. You should then contact the builder and ask them to put it right.
Ideally, this is where the story ends. However, if the builder or developer is not forthcoming, the next step is to file a complaint at the VBA (if the building isn’t more than 10 years old)
Always do your homework
Buying an apartment free from defects is the best way of avoiding the problem in the first place.
So, wecan’t overstate the importance of doing your due diligence on the builder or developer before you commit to an off-the-plan purchase. Research some of their previous projects to see if there have been any issues or remedial work planned.
Adam Zuchowski is a Property Lawyer at Off the Plan Conveyancer.
Considering buying an off-the-plan property and need an excellent conveyancer on your team? Contact Sutton Laurence King by calling 03 9070 9810 or emailing firstname.lastname@example.org.