As the proverbial "early bird", making an early purchase from an off-plan development can bring very appealing profits. But how can you be sure the finished property will be according to the quality your were promised, or even if it will really be finished? These are the questions that would hold you back from making a decision, and indeed they shouldn't be taken lightly. Fortunately, whether a project is successful is not a matter of luck, far from it. By making a thorough background check, you can accurately measure the viability of off-plan projects, and enjoy the juicy profits without having to worry about them. The following questions should always be made part of the due diligence process for a sound purchase and investment.
Knowing the Developer
When buying off-plan, knowing the developer's background is very important. It's not only about being a big or small company, but rather about previous successful projects, experience, as well as estimated financial health. Purchasing property off-plan from a successful, experienced developer is an easy and comforting experience, on the top of being very profitable.
Checking the Land Title Deed
It is also essential to investigate the Land Title Deed of the project, to verify if the developer is the true owner of the land, and if the land has been properly sub-divided according to the properties to be sold. Depending at which stage the project, this may not yet be the case as it usually takes some time, but such procedures should at least have been started. Attention should also be paid to access ways and zoning regulations, and even the background of the Land Title Deed itself. Your attorney is your best ally for this process, as he will be able to check and give definite answers to all these questions.
Checking E.I.A. and Building Permits
The next step is to check the relevant permits for the construction. Condominiums and other large scale developments, must go through the Environmental Impact Assessment (E.I.A.) before applying for a construction permit. This ensures that the developer has correctly planned the common infrastructure and facilities to support the number of units that are being sold, and is necessary to obtain the Building Permit for large developments, whereas smaller projects can apply directly for the Building Permit. This Building Permit ensures that the building has been planned with appropriate architectural standards, according to the zoning regulations and is safe to build. The time it takes to obtain the permits can vary a lot depending on the complexity and location of the project, but again, your attorney can follow this up and keep you informed.
Specifics of the Sale and Purchase Agreement
The Sale and Purchase Agreement of an off-plan purchase will contain special clauses regarding the time-frame of the construction, as well as payment plans and other specifics. These should be reviewed by your attorney, who will inform you if the contents are according to the law and according to the normal practices. For clarity, a list of the furniture and appliances included in the purchase should also be attached to the agreement.
Finally, once all permits have been duly obtained, the developer will start the construction. By law, the developer must build according to the sales brochures, or show units that have been used to promote the project, so the buyers are well protected by the law itself on the top of the Sale and Purchase Agreement. During this time, it is common for the sale price of the units to rise up substantially as the development becomes a reality, making the purchase an excellent investment, allowing for a profitable resale.