Consumers are being reminded of the importance of understanding their contract with NSW Fair Trading Minister, Matthew Mason-Cox, revealing complaints about buying properties off-the-plan have increased in the last year.
There has been a steady increase in the number of complaints received with 25 recorded last year, 14 lodged in 2013 and 10 received in 2012.
“While the overall volume of complaints is low, these complaints can represent financial losses for consumers,” Mr Mason-Cox said.
“Misleading or deceptive conduct and requests for refunds are the main areas of complaints. “In some instances consumers have been left waiting long periods for their properties to be completed, if at all.”
In one example, a consumer who paid a $5,000 holding deposit for a property off-the-plan was then told by the agent they had to pay a higher deposit or forfeit the property to other interested buyers. Despite withdrawing from the deal, and the agent agreeing to a full refund, none was provided. NSW Fair Trading negotiated the full refund of the $5,000 deposit for the consumer.
In another case, a consumer was told their $1,000 expression of interest deposit for a property off-the-plan would be returned if the sale did not proceed. NSW Fair Trading stepped in to negotiate a $1,000 refund for the consumer, after the sale did not proceed but no refund was provided.
Despite the extra complexities, most sales agents who market off-the-plan properties are professional and act lawfully. Mr Mason-Cox urged people to carefully scrutinise any contracts before signing.
“Purchasing properties off-the-plan offers a number of benefits for consumers, as they are often cheaper than purchasing an already completed property and allow more time to pay off the property,” Mr Mason-Cox said. “Off-the-plan purchases, however, are not without risk.
“I’d strongly encourage consumers to make sure they read and understand the terms and conditions of the contract before committing to a property off-the-plan.
“Before buying it is wise to carry out a physical inspection of the location of the proposed development, seek independent advice from an industry professional, and speak to a legal representative for advice on the terms of their contract.”