Its important that you, as a prospective buyer of a unit in a
residential development, do some homework. Development expert Mary Light
suggests the following.
- For starters make sure that the developer has a good track record.
The industry has attracted many entrepreneurs in the last few years
as a result of the property boom, but nothing makes up for experience.
- Ensure that the developer has at least three years of residential
development - theres a very big difference between residential
developments and commercial and industrial developments.
- Ask the developer for details of his previous developments and,
if possible, have a look at them to ensure that youre happy
with the standard of workmanship. Standards vary and not all developers
- Establish whether the land has been proclaimed or not. If it hasnt,
it is often very difficult for the developer to give exact occupation
dates and there is also the chance that the development wont
go ahead. The town planning process is extremely rigorous and its
therefore very difficult even for experienced developers to anticipate
council requirements and time delays.
- Time delays are usually not too serious for investment purchasers
but can be extremely stressful for buyers who intend living in the
units, so always add on two to three months to the occupation date
you are given, especially if the developer has not started the earthworks
- Find out exactly what costs are included in the purchase price and
those that are not. Typically costs included are bond registration
costs, transfer costs, transfer duty, and the NHBRC (National Homebuilders
Registration Council) levy.
- Ask for details of all additional costs such as curtain tracts,
paving, mirrors and bathroom accessories.
- If a show unit hasnt been built, ask to see some samples of
the finishes such as tiles, carpets, kitchen cupboards and counter
- Ensure that your deposit is held with the attorneys in their trust
account and with no one else.
- If you dont understand a clause in the contract, ask for it
to be explained again. Its very important that you understand
exactly what youre signing.
- Be very careful about signing a contract that allows for the developer
to increase prices. The developer should build anticipated price increases
into the cost from the outset.
- Insist on being given a copy of the contract once all parties have
- Ensure that the agent youre dealing with has a good understanding
of the contract and find out if they have experience in new developments
- Ask the agent how far along the town planning process is, and how
much longer it will take, bearing in mind that its very difficult
for them to guarantee an occupation date.