James Wilkinson & Aimee McGowan
Published on

In part two of our Home Buyers Guide: Buying off the Plans, we explore the 'nuts and bolts' of this increasingly popular home-buying option.

What is it?

Buying a property that has not yet been built, or is in the process of being built, is commonly called buying “off the plans”. There are quite a few differences compared to buying a property that already exists. Buying off the plans is often a way to buy into a new development, such as an apartment or a house and land package, and can be a good option for a purchaser struggling to find an existing property in a tight property market.


The Agreement

An “off the plans” agreement will be for a specific house or apartment in a development. An agreement can include conditions such as the purchaser arranging suitable finance and doing due diligence. If someone is considering purchasing a property “off the plans” they should get a lawyer to review the agreement.

A purchaser needs to consider how they will fund the purchase and may like to include a finance condition in their agreement. However, banks will not usually give an unconditional offer of finance for a property being settled more than 6 months in the future, so purchasers need to be confident they will be able to fund or borrow, the purchase price when the property is completed.

A deposit (often 10% of the purchase price) is payable by the purchaser, usually when all the purchaser’s conditions are satisfied. In most agreements, the deposit will be held by the developer’s lawyer in their trust account until settlement is completed. This ensures the deposit is protected, so if the purchaser validly cancels the agreement, or the developer cannot complete the development, the deposit can be paid back to the purchaser.

A developer is obliged to obtain a resource consent for the development, have a plan of the subdivision deposited, and obtain a code of compliance certificate and a new title to the property. An agreement often allows a developer the ability to cancel the agreement if resource consent cannot be obtained or the conditions of the resource consent are not acceptable to the developer. A purchaser would then be entitled to have their deposit refunded. Many agreements include a timeframe for the completion of the development, with an ability for the purchaser and/or developer to cancel the agreement if the dwelling is not completed. As delays are inevitable when it comes to property development, it is often prudent to ensure an agreement includes a “sunset clause” that allows the purchaser to cancel the agreement and obtain their deposit back if the property is not completed within a certain timeframe.

Settlement usually takes place one to two weeks after the property is completed and the developer has obtained a code compliance certificate and title for the property.



When an existing property is purchased, a lawyer would usually search the record of title and provide advice about any documents registered on the title (such as easements and covenants). However, with an off the plans purchase, many of the documents on the future title will be unknown.

Some agreements will include proposed covenants, which may extend to the 'look and feel' of the development and include restrictions regarding fences, landscaping, exterior colour, and cladding choices and may even include car parking restrictions for an owner or their visitors. For an apartment being purchased off the plans, an agreement may include details of the proposed body corporate, including the likely body corporate levies and body corporate rules.

Often the developer will have the freedom to register any documents they deem appropriate on the title. If a resource consent has been issued, this may give an indication of the documents likely to be registered on the title, but often there is an element of trust that the developer will only register appropriate documents on the title. Most agreements will provide that the purchaser is deemed to have accepted the title to the property and must not object to any documents registered on the title.


How we can help

Purchasing off the plans can be a great way to get on the property ladder, and the time between signing the agreement and purchasing the property can help save towards the purchase price. But off the plans agreements can be complicated, so it is important to get good advice before signing such an agreement. We can help you understand the terms of the sale and purchase agreement and any covenants or other documents proposed to be registered on the title.

For help or more information, please reach out.