Off-the-Plan Sales in Victoria: What Agents, Developers and Buyers Need to Get Right Before Contracts Are Signed

Crownmark Lawyers | Property & Conveyancing

Off-the-plan sales are different from ordinary property transactions.

The buyer is committing to a property that may not yet exist in its finished form. The developer is selling against plans, specifications and a future completion date. The selling agent is often working between both sides while construction, finance and registration continue in the background.

That makes the contract more than a document used to record the sale.

For developers, agents and purchasers, getting the legal position clear before contracts are signed can reduce uncertainty later in the project.

The Contract Needs to Reflect the Development

An off-the-plan contract needs to deal with circumstances that would not usually arise in the sale of an established property.

Construction may still be underway. The plan of subdivision may not yet be registered. Specifications may evolve, and settlement may be months or even years away.

The contract should therefore clearly address matters such as the proposed lot, deposit arrangements, settlement, registration of the plan, specifications and the circumstances in which changes may occur.

Victorian off-the-plan contracts must also contain a prescribed warning drawing the purchaser's attention to matters including the time that may pass before ownership and the possibility that the property's value may change during that period. Deposits for these transactions are subject to a 10 per cent limit.

For developers, a carefully prepared contract can provide greater certainty across a large number of sales.

For purchasers, the same document needs to be understood before the commitment is made.

Plans and Specifications Matter

Buyers are often making their decision based on architectural plans, floorplans, renders, finishes schedules and marketing material.

The completed development, however, may not be identical in every respect to what was available at the beginning of the sales campaign.

This is where the contract becomes particularly important.

Developers should ensure that the contract appropriately addresses permitted variations and the process surrounding changes to the development.

Purchasers should understand how much flexibility the developer has and whether a proposed change could affect the particular lot they are buying.

For agents, this is also a reason to be careful about making statements regarding dimensions, finishes, views, common areas or other features unless they accurately reflect the approved material and contractual position.

Sunset Clauses Are Not Simply an Exit Mechanism

Off-the-plan contracts commonly include a date by which the plan of subdivision is expected to be registered.

These provisions are often referred to as sunset clauses.

They should not be treated as giving a developer an unrestricted right to cancel a contract if a project takes longer than expected.

In Victoria, a developer's ability to exercise a sunset clause is restricted. Generally, the purchaser's written consent or permission from the Supreme Court of Victoria is required for the developer to rescind in reliance on the clause.

This makes the drafting and management of project timelines particularly important.

Where delays arise, developers and purchasers should obtain advice about the actual terms of the contract rather than making assumptions about what the sunset date allows either party to do.

The Deposit Position Should Be Clear

Deposits are another area where off-the-plan transactions differ from many ordinary sales.

Because settlement may be a significant time away, the way deposit funds are dealt with is important for both sides.

The amount, payment timing and contractual requirements should be clear before the purchaser signs.

Selling agents should also ensure that deposit arrangements communicated during negotiations are consistent with the contract rather than relying on informal assumptions between the parties.

A small inconsistency at the beginning of a transaction can become much more difficult to resolve after contracts have been exchanged.

Agents Are an Important Link in the Transaction

The selling agent will often be the first person a purchaser approaches with questions.

That makes communication between the agent, developer and legal team particularly important.

Questions about proposed settlement dates, inclusions, contract amendments, purchaser nominations, deposits or changes to specifications may need legal input before an answer is given.

An agent does not need to determine the legal effect of the contract.

In fact, recognising when a question should be referred to the developer's legal representative can help protect the transaction and ensure that buyers receive accurate information.

Consumer Affairs Victoria similarly distinguishes the agent's role from preparation of the vendor's statutory disclosure documents, while recognising that agents should ensure the appropriate documents are provided to prospective purchasers.

The Current Duty Concession Adds Another Consideration

Victoria's temporary off-the-plan duty concession has been extended for eligible contracts entered into before 21 April 2027.

It currently applies more broadly to eligible off-the-plan apartments, units and townhouses in strata subdivisions with common property, including purchases by investors, companies and trusts.

That may make off-the-plan property more attractive to some purchasers, but tax concessions should not replace proper consideration of the contract itself.

Eligibility and the amount of any concession depend on the particular transaction, and purchasers should understand the position before relying on an expected duty saving.

Get the Legal Position Clear Before the Sale Becomes Urgent

Off-the-plan transactions involve more moving parts than the sale of an established property.

The contract needs to anticipate a development that is still progressing, while the agent, developer and purchaser may each be working to different commercial timelines.

Early legal preparation helps establish those expectations before the transaction becomes difficult to unwind.

For developers, that means having the contractual framework in place before the sales campaign gathers momentum.

For agents, it means knowing when contractual questions need to be referred for advice.

For purchasers, it means understanding what is being bought, what may change and what obligations begin once the contract is signed.

Speak With Crownmark Lawyers

Crownmark Lawyers assists developers, property owners, real estate professionals and purchasers with residential and commercial property transactions, including contract preparation and review, off-the-plan sales, property development matters and conveyancing through to settlement.

Obtaining advice early can help identify issues before they begin affecting sales, project timelines or settlement.

Contact Crownmark Lawyers to discuss your property transaction.

Harjit Mahindroo

Managing Partner

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Phone: 1800 884 751

From Overseas: +61 3 8595 4338

Email: info@crownmarklaw.com.au

This article contains general information only and does not constitute legal advice. Off-the-plan transactions vary depending on the development, contract and circumstances. You should obtain advice regarding your specific situation.