Gedye and Sons

SOLICITORS FROM THE CITY TO THE COUNTRY

London

020 3427 5078
infoOB@gedye.co.uk

The Lakes

01539 532313
info@gedye.co.uk

Monday 25th September 2017

Buying a new home off plan

It is common practice for developers to offer some or even all of the units on a development for sale long before construction work has finished. It can significantly reduce their borrowing costs but how does it affect you as a buyer?

The position here differs in the following respects:

There is clearly a strong reliance to be placed on the sales particulars and specification provided to you. Normally, you can view in person exactly what you hope to buy.

If the object of your desire is not yet fully built then you are being asked to have faith in the builders ability to meet the standards you have been led to expect by its sales department. The specification is clearly key to pin pointing what you will be getting for your money. The clearer it is the better so that named equipment for instance, can be checked although there is usually a waiver for the builder to cover a particular item no longer being in stock or manufactured. Ideally, the specification should then be appended to the contract so that its clear what is included for your money.

You will probably have been given a plan showing the location and the layout.

Are you able to strictly rely upon that plan?

We have, unfortunately, had several purchases were the plans provided to us were for either an entirely differerent unit to, or did not show the full extent of what the buyer thought he or she was buying.

Often, developers will give themselves plenty of latitude in their contracts so that for instance, they may refer to a permitted level of variation from the specification, size or layout , which in terms of size, is commonly limited to no more than 5% by area. You need to be aware of these possible changes or uncertainties.

What about the completion date given to you by the sales team?

It is rare for a fixed or definite date to be given for completion at the point of exchange of contracts for a new build property. It is usual, for the sales team to give a general estimate of the month or even the season construction is expected to be finished, but that cannot be relied on with any degree of certainty and will often change.

The sale contract will almost invariably give a formula to calculate when completion will be and you as the buyer have to be ready to go just as soon as you are told its finished!  In practice, two to four weeks notice will be given in writing.

There should also be a “long stop” completion date, so that if delays truly become significant, you have the option to bail out and recover your deposit, and a bit of careful thought needs to be given as to when that date should be.

If you are buying with the aid of a mortgage then your offer is only valid for you to accept for a limited period of time. Making sure that your finance will be available when your new home is ready and you need it, is therefore crucial.

This article is intended to be read in conjuction with the article entitled “buying a newly built home”. For new build purchases generally or for contract reassignments, please see our other articles.

All news & events

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It is common practice for developers to offer some or even all of the units on a development for sale long before construction work has finished. It can significantly reduce their borrowing costs but how does it affect you as a buyer?

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