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Off the plan properties: know your warranty and defect periods

Off the plan properties are becoming a very popular choice for many people, particularly first home buyers.

Once the excitement of the property settling passes and all of the new furniture is moved into the property, it is essential that new owners of off the plan properties diarise the warranty/defect period.  The Contract for Sale for the property typically includes the following:

  • pre-settlement inspection criteria;
  • reporting requirements for defects, including details such as:
    • definition of a defect;
    • manner of reporting defects;
    • time frame for reporting defects;
    • resolution of any disputes around whether or not an item is a defect.
  • warranty terms, such as:
    • what is (or is not) covered by the warranty, e.g workmanship, products installed in the property; and
    • expiration of warranty period.

Every Contract for Sale will be different and the parties are bound by the terms of the Contract, however, it is important to check the Vendor’s requirements around defects and warranties and to diarise key deadlines.  Failure to be fully informed of the specific terms may mean that a potential defect which should be remedied by the Vendor is not because strict adherence to the contractual terms did not occur.  For example, some vendor developers require that a defects schedule (usually for minor defects) is submitted before the purchaser moves in, otherwise the developer will not fix the defects at its expense.  We often see this sort of requirement in properties with floor boards, i.e. if you move in and then later state that there is a scratch on the floor board, many developers will not repair any damage to floor boards because it is not possible to ascertain whether the damage was caused as a result of moving in or it was existing damage.

Buyers of off the plan properties need to ensure that all key dates for defects and/or warranties are diarised and that the procedure stipulated in the Contract for Sale for reporting those issues is strictly followed.

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