Buying a Property Off the Plans in Canterbury

Buying a property off the plans means entering a purchase contract for a property that has not yet been built or is still under construction. This is common in Canterbury's active new build sector in Rolleston, Lincoln, Halswell, Wigram, and outer Christchurch subdivisions. It has specific advantages and specific risks that buyers must understand.

How Off-Plan Purchases Work

You review plans, specifications, and a show home or computer-generated renders, and sign a sale and purchase agreement for a property at its contracted price before it is built. The agreement typically requires a deposit (often 10% of the purchase price) paid at signing, with the balance payable at settlement when the property is completed and title issues. The settlement date is linked to practical completion and title issue, rather than a fixed calendar date.

The Key Risks

Off-plan purchases carry specific risks not present in standard property purchases. Developer risk is the primary one: if the developer runs into financial difficulty, the project may be delayed, modified, or in serious cases not completed at all. Always research the developer's track record and financial standing before committing. Title risk exists because the section title may not have issued yet - confirm when title is expected and ensure your agreement includes appropriate protections if title is delayed. Price movement risk works both ways: you lock in the contract price before the property is built, meaning if the market rises you benefit, but if it falls you are committed at the higher price.

Contract Review Is Essential

Off-plan contracts are prepared by the developer's lawyers and are designed to protect the developer's interests, not yours. Always have your own independent solicitor review the contract before signing. Key items to check: the specifications and what is and is not included; sunset clauses that allow either party to cancel if completion is delayed beyond a certain date; what variations the developer can make to the plans without your approval; deposit protection arrangements; and the grounds on which either party can cancel.

Deposit Protection

Your deposit should be held in a trust account rather than being accessible to the developer for construction funding. Confirm this explicitly with your solicitor - some Canterbury developers use deposit funds for construction, which increases your risk if the project fails.

For general information only. Always obtain independent legal advice from a qualified Canterbury solicitor before signing any off-plan purchase agreement.