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GJA Law – Sydney’s Trusted Off-the-Plan Drafting Lawyers

Off-The-Plan Drafting in Sydney

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Off-The-Plan Drafting is a significant legal matter that affects many individuals and families in Sydney. At GJA Law, we provide clear, practical advice and tailored services designed to protect your interests. Our approach combines local expertise, transparency in fees, and a commitment to simplifying complex legal processes.

What Is Off-The-Plan Drafting?

Off-the-plan drafting refers to the preparation of legally binding contracts for the sale of residential or commercial lots that do not yet exist in physical or legal form—typically because the subdivision or strata plan has not been registered. In Sydney, this commonly applies to apartment buildings, townhouse developments, and mixed-use projects.

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    Unlike standard property contracts, OTP contracts must account for future uncertainties: final floor plans, building specifications, strata by-laws, and settlement timing. The drafting process must balance developer flexibility with buyer protections—a delicate equilibrium that demands expert legal craftsmanship.

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    Role of a Property Lawyer in Off-the-Plan Drafting

    A property lawyer specialising in off-the-plan work does far more than copy a template. At GJA Law, our lawyers act as strategic risk managers and commercial enablers by:

    • Drafting bespoke contracts aligned with your project’s structure and timeline.
    • Ensuring compliance with the Conveyancing Act 1919 (NSW), Strata Schemes Development Act 2015 (NSW), and Australian Consumer Law.
    • Advising on disclosure obligations, deposit handling, and vendor warranties.
    • Coordinating with surveyors, certifiers, and marketing teams to align legal terms with sales materials.
    • Updating contracts to reflect legislative changes—such as recent reforms to sunset clauses.

    Our proactive involvement from the design phase ensures your sales documentation is both legally defensible and market-ready.

    Legal Framework Governing Off-the-Plan Contracts

    Off-the-plan sales in NSW are heavily regulated to protect buyers from uncertainty and developer overreach. Key legislation includes:

    • Conveyancing Act 119 (NSW): Sets mandatory disclosure requirements and cooling-off rights.
    • Strata Schemes Development Act 2015: Governs the registration of strata plans and developer obligations.
    • Property and Stock Agents Act 2002 (NSW): Regulates agent conduct and marketing disclosures.
    • Australian Consumer Law (Schedule 2, Competition and Consumer Act 2010): Prohibits misleading or deceptive conduct in marketing and contract terms.

    Recent reforms—such as restrictions on unilateral contract rescission under sunset clauses—have significantly raised the stakes for developers. Non-compliance can result in contract rescission, regulatory penalties, or class actions.

    Key Components of an Off-the-Plan Contract

    A well-drafted OTP contract includes several critical elements:

    • Clear identification of the proposed lot using draft strata or subdivision plans.
    • Detailed inclusions and specifications (e.g., finishes, fixtures, car spaces, storage).
    • Deposit terms (typically 10%), held in a solicitor’s trust account until registration.
    • Settlement trigger: Defined as the registration of the strata or subdivision plan.
    • Sunset clause: Specifying the maximum timeframe for registration and settlement.
    • Variation provisions: Allowing reasonable changes without triggering buyer rescission rights.
    • Disclosure schedules: Including draft by-laws, planning approvals, and material facts.

    At GJA Law, we ensure every clause is precise, consistent, and enforceable—avoiding ambiguity that could be exploited in disputes.

    Drafting Sunset Clauses and Variation Provisions

    Sunset clauses have become a focal point of regulatory scrutiny. Under Section 66ZL of the Conveyancing Act, developers cannot unilaterally rescind an OTP contract after the sunset date unless they obtain a court order—requiring proof that the delay was beyond their control.

    We draft sunset clauses with realistic timeframes (often 24–36 months from exchange) and include mechanisms to extend by mutual consent. Equally important are variation provisions, which permit minor changes to plans or specifications without giving buyers grounds to rescind. These must be carefully worded to comply with the “material prejudice” test established in case law.

    Our contracts distinguish between:

    • Non-material variations (e.g., minor layout adjustments) that don’t require buyer consent.
    • Material changes (e.g., reduction in lot size) that do trigger notice and rescission rights.

    This layered approach protects your project’s flexibility while respecting buyer rights.

    Disclosure Obligations and Risk Management

    Developers must provide buyers with a comprehensive disclosure statement before exchange, including:

    • Draft strata plan and by-laws.
    • Planning approvals and conditions.
    • Easements, covenants, or proposed infrastructure.
    • Any changes since the original disclosure.

    Failure to disclose a “material fact”—such as a future road widening or noise corridor—can render the contract voidable. At GJA Law, we implement a rigorous disclosure checklist and update protocols to ensure ongoing compliance, even during long construction periods.

    We also advise on marketing materials: brochures, renderings, and digital content must align with contractual terms to avoid misleading conduct claims.

    Managing Buyer, Finance, and Settlement Risks

    OTP contracts carry unique settlement risks. Buyers may:

    • Lose finance approval due to changing lending criteria.
    • Attempt rescission based on minor plan changes.
    • Delay settlement after registration, affecting cash flow.

    Our contracts include practical risk-mitigation tools:

    • Finance clauses that require buyers to use best endeavours to secure funding.
    • Default and termination rights if buyers fail to settle post-registration.
    • Clear notice protocols for plan registration and settlement scheduling.

    We also advise on holding deposit structures and inter-seller coordination to ensure simultaneous settlements across large developments.

    Common Drafting Errors in Off-the-Plan Contracts

    Even minor drafting oversights can have major consequences. Common errors we see include:

    • Vague descriptions of inclusions or lot boundaries.
    • Overly aggressive sunset clauses that ignore recent legal reforms.
    • Inconsistent plans between marketing materials and legal documents.
    • Missing or outdated disclosure schedules.
    • Failure to address GST treatment (e.g., margin scheme eligibility).

    At GJA Law, we audit every contract against current case law, legislation, and market best practices—ensuring your documentation is both legally sound and commercially effective.

    • I have used GJA on several occasions and always found them to be friendly, professional and thorough.

      Fiona

    Our Services

    We provide comprehensive guidance on Powers of Attorney & Guardianship, including:

    • Preparing and reviewing agreements
    • Clear advice on obligations and entitlements
    • Negotiating terms to achieve fair outcomes
    • Working alongside advisers and professionals
    • Ensuring matters are finalised efficiently

    Why Choose GJA Law?

    • Advice tailored to your circumstances
    • Transparent pricing with no surprises
    • A proven history across key areas of law
    • Technology-driven processes that minimise delays
    • Personalised service with a focus on peace of mind

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    Contact Us

    If you are dealing with off-the-plan drafting in Sydney, contact GJA Law today. Our experienced lawyers will guide you through the process with confidence and provide the support you need.

    Common Off-The-Plan Drafting FAQs

    What is the most important legal change affecting off-the-plan contracts in recent years?

    The most significant reform is the restriction on sunset clauses. Developers can no longer unilaterally rescind a contract after the sunset date simply because the project is delayed. To terminate, you must now obtain a Supreme Court order by proving the delay is beyond your control, the termination is just, and you have acted reasonably. Our drafting ensures your sunset clause is compliant and incorporates realistic timeframes with clear processes for extensions.

    What must be included in the mandatory disclosure statement for buyers?

    The law requires a comprehensive disclosure statement before a buyer signs. Key documents include the draft strata plan, proposed by-laws, planning development consent, and details of any easements or covenants. Critically, you must also disclose any known material facts that could affect the property’s value or use (e.g., future roadworks, flight paths). We provide a thorough disclosure checklist and manage updates throughout the project to prevent rescission risks.

    Can we make changes to the building plans after contracts are signed?

    Yes, but the contract’s variation provisions are crucial. The law permits only “non-material” changes without buyer consent. We draft these provisions to define allowable variations (e.g., minor adjustments to layout or specifications) clearly. Any change that could “materially prejudice” the buyer (like significantly reducing size or omitting a car space) requires notice and grants the buyer a right to rescind. Our precise drafting protects your project’s flexibility while respecting buyer rights.

    How do you handle the 10% deposit to ensure compliance and security?

    By law, the buyer’s deposit (usually 10%) must be held in a trust account operated by a solicitor, licenced conveyancer, or real estate agent until settlement. We ensure the contract stipulates this and clearly outlines the conditions for its release. This structure protects both parties: the buyer’s funds are secure, and the developer can confidently report pre-sales to financiers, knowing the deposits are legally secured and managed.

    What happens if a buyer fails to secure finance or settle on time?

    Off-the-plan contracts should include robust default clauses. While buyers typically have a finance clause, we draft it to require them to use “best endeavours” to obtain approval. If a buyer fails to settle after the plan is registered, the contract must provide clear termination rights for the developer, allowing you to retain the deposit and resell the lot. We also include precise notice procedures for registration and settlement to minimise delays.

    How do you ensure our marketing materials don’t create legal risk?

    Marketing materials like artist impressions and brochures can form part of the contract under consumer law if they make specific promises. We conduct a legal review of all promotional content to ensure alignment with the contractual disclosure. This prevents claims of misleading or deceptive conduct by ensuring that all representations about finishes, views, or amenities are accurate, qualified, or clearly reflected in the contract’s detailed schedules.

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