Unarguably, off-plan purchases appear to be a convenient way of accessing property for investment or living, especially for first-time home buyers. It gives false comfort to the buyer and an escape route to the seller, particularly at the very beginning.
But experience has shown that, unless sufficient due diligence is done, the comfort, which the buyer thinks he enjoys, may turn out to be a mere façade, hence the need to engage the services of a lawyer who provides guidance and advisory services.
Though the brochure may look stunning, the finishing may also look premium, and the payment plan may seem flexible, there are still a lot more to look out for, and that demands the professional eyes of a lawyer.
The ‘Contract of Sale’, which the developer usually makes available for the buyer to sign, is a delicate and slippery document that needs an expert’s guidance to understand before signing.
Charis Legal Practice, a firm of lawyers known for their Corporate/Commercial Law insights, advises on sufficient due diligence before commitments are made with payment, citing a lady-buyer whom they saved from incurring a huge loss when she sought their services.
“During our due diligence, we discovered that the developer’s title was defective. The documents did not align with what was actually registered at the Lands Registry. In other words, the land ownership was not as clean as presented,” the lawyers disclosed.
“When we raised the issue, the developer offered our client an apartment in another project with a proper title. We carried out fresh due diligence on the new project, confirmed that the title was in order, and then proceeded to review the Contract of Sale,” they added.
According to them, that experience reminded them that off-plan property contracts often say one thing but mean another, noting that, if you don’t know what to look for, you can easily sign away your protection even before the first block is laid.
They listed some clauses that are the biggest traps they have seen investors miss in off-plan documents. These include ‘specification may vary; design and structural adjustments; ongoing permit applications’, among others.
Some clauses, the lawyers note, sound innocent until you realize it gives the developer free rein to modify design, materials, or specifications as they deem fit.
“You’ll be surprised how quickly marble countertops that you saw in the brochure and 3D become tiles, branded sanitary fittings are replaced with generic ones, and imported lighting fixtures suddenly turn local during development,” they stated.
They explained further that some developers include in their contracts the right to alter designs or layouts due to ‘government regulations’ or ‘architectural improvements.’
That may sound reasonable until you see balconies disappear, penthouse terraces shrink, or the building’s exterior colour change completely, while hiding under clauses phrased as ‘structural adjustments subject to regulatory directives.’
