Off-the-Plan: 7 Questions to Ask Before Paying a Deposit

Off-the-plan contracts are different. They're longer. The settlement date is often years away. The property doesn't exist yet. The developer drafted the contract in their own favour, and almost everything you'd normally inspect — finishes, layout, lift, view, ceiling height — is a promise, not a fact.

I'm not anti off-the-plan. Some of the best buys we've handled have been off-the-plan, with serious negotiations on price, finishes, or both. But you need to ask the right questions before you sign and pay a 10% deposit. These are the seven I'd want answered.

1. What's the sunset date — and what actually happens if they miss it?

The sunset date is the deadline by which the development must be registered and/or the occupation certificate issued. If the deadline passes, either party can usually rescind the contract.

But here's the thing: developers used to use sunset clauses as a weapon. They'd let a project run late, rescind the contract, and resell the same unit at today's higher price. That was rampant a decade ago.

Since 2015 (with further tightening since), NSW law has stopped developers from unilaterally rescinding on a sunset clause. They have to either get the buyer's written consent (good luck if the market has gone up) or get a Supreme Court order showing the rescission is justified. The buyer-protection provisions sit in the Conveyancing Act.

So a developer-friendly sunset clause is less dangerous than it used to be — but it's still worth knowing:

• The exact sunset date (in the contract)
• What happens to your deposit if either party rescinds
• Who pays the legal costs if it goes to court
• Whether interest accrues on your deposit and at what rate

Long sunset dates favour developers. Short ones favour buyers — but developers won't usually agree to a short one, because they want flexibility for construction delays.

2. Who's the developer, and what's their track record?

The developer's name on the contract matters more than the agent's. You're trusting them to deliver, on time, to the standard they promised.

What to check:

• Past projects. Find their completed buildings. Visit them. Look at finish quality, common-area condition, defect rectification.
• Owners corporation reputation. Strata reports from their past projects often reveal whether they handled defect claims well or fought them tooth and nail.
• Company structure. Is the developer entity on the contract a special-purpose vehicle? (It almost always is.) Does the parent company have substance? Has it built before?
• Financial position. Are they relying on pre-sales to get the project bank-funded? How many pre-sales have they got? This affects whether the project gets built at all.

A developer with a strong track record might command a small premium. It's usually worth it.

3. What can the developer change between now and settlement?

Every off-the-plan contract includes a clause giving the developer some right to vary plans, finishes, layouts, or materials. The question is how much.

Common variations include:

• Minor area changes (often allowed up to 5% before the buyer gets a right to rescind — not a statutory threshold, just a common contractual convention)
• Substitution of finishes ("equivalent quality" — defined how?)
• Common-area changes (lobby design, pool, gym)
• Floor plan adjustments (sometimes "non-material" changes are allowed unilaterally)
• Strata scheme changes (number of lots, by-laws, allocation of common property)

NSW has the concept of "material" changes — changes that significantly affect the buyer. If the developer makes a material change without consent, the buyer can rescind. But what counts as material is contested and you don't want to end up arguing it in court.

We negotiate this clause down for most of our clients. Tighter caps on area variation, named materials rather than "equivalent quality," and explicit rights for the buyer to rescind if material changes happen.

4. How is my deposit held, and when does the developer get it?

Your deposit — usually 10% of the purchase price — must be held in a trust account by the deposit holder (typically the agent or the developer's solicitor). Under current NSW off-the-plan rules, the deposit is generally not released to the developer before completion.

What to check:

• Where exactly is the deposit held (named trust account, name of the holder)
• Is interest payable on the deposit, and to whom does it go (usually split 50/50 or paid to the buyer)
• What happens if the developer becomes insolvent before settlement
• Whether a deposit bond is acceptable as an alternative to cash

Deposit bonds are common and we usually recommend them for off-the-plan — they tie up less of your money during a long wait to settlement, and you only pay a small premium.

5. What's in the disclosure statement — especially the proposed by-laws?

NSW off-the-plan vendors must attach a disclosure statement that includes proposed by-laws, draft strata management statement, draft schedule of finishes, and a draft plan.

Read the by-laws. Really read them.

Common things that bite buyers later:

• Pet by-laws — some new developments have outright pet bans (though these are increasingly being struck down)
• Short-stay letting — banned in some buildings, allowed in others
• Renovation rights — what you can and can't change inside your own unit
• Parking and storage — are spaces titled or licensed, and what are the restrictions?
• Special by-laws benefiting the developer — for example, naming rights, signage, ongoing service contracts

These can be hard to change once the building is registered. A by-law saying you can't keep a dog will limit your resale market forever.

6. What's the strata budget for the first year and beyond?

The disclosure statement should include an initial budget — what the owners corporation will spend in year one. Look at:

• Estimated levies per unit — typically broken down into administrative fund and capital works fund
• What's covered (utilities for common areas, insurance, building manager, gym, pool, lifts)
• What's missing (long-term maintenance plans, defect rectification reserves)

As of April 2026, recent reforms require developers of multi-storey schemes to engage independent qualified surveyors to review and certify the initial maintenance plan and first-year budget. That's a big improvement on the old system where developers under-budgeted to make levies look low at sales, then levies jumped 40% in year two. Worth checking the exact scope and commencement with your conveyancer for your specific scheme.

Even so, the question to ask is: is this budget realistic? A building with a pool, a gym, two lifts, and a concierge can't run on $1,500 per quarter per unit. If the budget looks suspiciously low, it probably is.

7. What's my exit if my circumstances change?

Off-the-plan settlement might be 18 months, 24 months, sometimes 4 years away. A lot can change.

What if:

• You lose your job or your income drops materially?
• You separate or divorce?
• You decide to move overseas?
• Lender valuation at settlement comes in below the contract price?

Most off-the-plan contracts don't give you an easy exit for any of these reasons. The deposit is locked in. You can sometimes on-sell ("nominate") to another buyer, but the contract might restrict that, and you'll need the developer's consent.

Read the assignment / nomination clause carefully. If it allows you to substitute another buyer (often for a small fee), you've got an exit. If it requires the developer's discretionary consent, your "exit" is effectively at their mercy.

This is also where finance risk lives. If valuations soften by the time the building is finished, and the property is now worth less than the contract price, your bank will lend less. You'll need to cover the gap in cash. There's no standard contract clause that protects you against this — it's why off-the-plan buyers should always have a finance buffer.

The honest summary

Off-the-plan can be a good buy. It can also be the worst property decision you make. The difference is almost always in the contract.

We've negotiated off-the-plan contracts to add hard variation caps, accelerated sunset dates, named finishes, free assignment rights, and developer warranties on common-area defects. Some developers laugh and say no. Some agree. Plenty negotiate in between.

But you only get those terms if you ask before you sign.

If you've been handed an off-the-plan contract and given a few days to sign — book a free 15-minute call. We turn around off-the-plan reviews in 48 hours, and the contract is the most expensive part of the property. It's worth getting right.