Help Needed for 'off the plan' Strata Buyers

In Australia (unlike many other parts of the world) a lot of residential strata apartments are developed and sold using an 'off the plan' sales method where buyers contract to buy before construction and complete purchases when the building is finished.

And, as far as I can see, 'off the plan' strata sales are here to stay and will remain the predominant way to buy new strata apartments in Australia.

Whilst this approach helps developers fund the development and lowers prices for buyers, it also has some pitfalls for everyone involved because it relies on assumptions about the future and can be affected by unexpected changes in personal, business and economic conditions.

So, buyers need to take extra care and be better informed when buying an 'off the plan' strata apartment.  

There's plenty of information for buyers from an investment, amenity and finance perspective like this recent booklet produced by Property Observer and Frasers.  However, when you look at that booklet closely, there's nothing at all in there about important strata title issues that will affect buyers and could lead to future strata disappointments.  

That got me looking at the results of a google search for 'buying off the plan strata apartments' to see what did exist on the subject in Australia with the following outcomes.

The NSW Fair Trading webpage on buying off the plan has a few lines of information about unit entitlements, exclusive use by-laws and building management comments plus a link to their more general information about buying into a strata scheme (which is actually pretty good).

Our old superhero friend, Strataman talks briefly about levies, lot sizes, restrictions on facility use and by-laws.  Plus Strataman provides links to other (more or less) useful webpages.

The Strata Community Australia website has short article which raises issues about strata manager appointment (and perceptions of conflicts of interest), first AGMs and defects.

Findlaw chooses to identify defects, by-laws and unit entitlement allocations as the key strata issues for off the plan buyers at their webpage.

The NSW Law Society Guide to Buying a Home identifies participation in the strata corporation, levies, by-laws and common property maintenance as the key strata issues.

And, Housenet's webpage only refers to Home Building Act insurance requirements.

So, when the available information is pretty limited, basic and incomplete, It's no wonder first time strata owners don't know much. 

I suppose there isn't a lot of incentive for developers, financiers and sales agents (who don't understand strata issues  and/or worry that giving too much strata information will scare off buyers) to provide more.  But, it can't be too hard to put together better material for strata buyers about the membership of the strata corporation and it's role, budgets and levies, by-laws and other restrictions, meetings and how strata and building managers work.

Regardless of the reasons why, it's a sad state of affairs that we have such limited publicly valuable information in relation to the predominant form of future property ownership and housing in Australia.


Francesco ...