Purchasing Off the Plans: What you Need to Know Before Making an Offer
Buying property off the plans is often sold as a smart move, lock in today’s price, secure tomorrow’s lifestyle, and let the market do the heavy lifting.
But here’s the reality: you’re not buying a property. You’re buying a set of drawings, a timeline, and a developer’s promise that everything will go to plan. Strip it back, and the transaction is simple: you’re committing to something that doesn’t yet exist. That gap, between what’s promised and what’s eventually delivered, is where most of the legal and financial risk sits.
What does “Off the Plans” actually mean?
At a basic level, buying off the plans means agreeing to purchase a property that hasn’t been built yet.
But the more important point is this: you’re locking yourself into a legal agreement long before you can properly assess what you’re buying. And in New Zealand, while legislation like the Property Law Act 2007 provides the framework, it’s the fine print of the contract that decides how this plays out in reality.
You’re Not Just Buying a Property, You’re Backing a Developer
When you buy an existing home, you can walk through it, test it, and trust your instincts. Off the plans, you lose that entirely. Instead, you’re backing the developer, financially and legally.
So the real question isn’t just what are they building? It’s: do they have a track record of delivering what they promise, on time, and without compromise?
Looking into previous developments, timelines, and even speaking to past buyers can reveal far more than any marketing material. That due diligence is essential, not optional.
The Contract Isn’t Just Paperwork, It’s the Whole Deal
One of the most common (and costly) mistakes buyers make is assuming the agreement is standard or “fair.”
It’s not standard and it may not be fair.
Off-the-plan contracts are typically drafted to protect the developer first, and the buyer second. That imbalance isn’t accidental, it’s commercial.
Developers may retain the ability to:
- Adjust plans or specifications;
- Extend completion timeframes;
- Cancel the agreement under certain conditions.
Take sunset clauses, for example. On paper, they simply set a deadline for completion. In practice, some allow the developer to walk away if the project no longer stacks up financially. From your perspective, that could mean waiting months, or years, only to end up back at square one.
This is where legal advice is critical. A good property lawyer doesn’t just explain the contract, they challenge it, test it, and ensure you understand where the real risks lie.
Timing Can Be a Hidden Risk
Here’s something that often catches buyers off guard: the time gap.
It’s not unusual for 12 to 24 months to pass between signing the agreement and settling the purchase. That’s a long time in anyone’s life, and in the property market. Your income might shift. Interest rates can rise. Lending criteria can tighten. And critically, the bank’s view of the property itself may change.
Banks will reassess your situation closer to settlement, and that original pre-approval may not translate into finance approved at the time of settlement.
So the real question isn’t just “Can I afford this now?”
It’s: Will I still be in a position to complete this purchase in two years’ time?
The Deposit, Safe or at Risk?
Most off-the-plan purchases require a deposit, often around 10%. It feels like a standard step, but the way that deposit is handled can make a big difference.
Ideally, it should be held in a secure trust account until settlement. That way, if something goes wrong, say the development doesn’t proceed, your funds are protected.
But some agreements allow developers early access to deposits. That shifts risk onto you, especially if the developer runs into financial trouble.
It’s a small clause but one with serious implications.
Title, Subdivision and the Unknowns in Between
In many Central Otago developments, particularly subdivisions, the legal title for your property doesn’t exist yet when you sign the agreement.
That means your purchase depends on the successful completion of subdivision processes governed by laws like the Resource Management Act 1991 and local council approvals.
Delays aren’t uncommon. Neither are changes, things like easements, accessways, or land covenants can all emerge during this process.
These aren’t necessarily deal-breakers, but they can affect how you use the property and what it’s ultimately worth.
What You See Isn’t Always What You Get
Marketing for new developments is designed to sell a vision. Sun-soaked decks, high-end finishes, perfectly styled interiors, it’s easy to get caught up in it.
But the legal agreement usually tells a more cautious story.
Developers often retain the right to make substitutions or minor changes during construction. That might mean different materials, altered layouts, or slight changes in floor area.
Individually, these changes can seem minor. Collectively, they can shift the feel, or even the value, of the property.
That’s why it pays to focus less on the brochure and more on the specifications.
Central Otago Has Its Own Dynamics
There’s something unique about buying property in Central Otago. It’s not just another market, it’s a region in transition.
Rapid population growth, infrastructure pressure, and ongoing planning changes all play a role. Developments can be affected by council capacity, zoning updates, or even seasonal construction challenges.
At the same time, many buyers in the region aren’t simply purchasing homes, they’re investing in lifestyle properties, holiday homes, or short-term accommodation opportunities.
Each of these uses comes with its own legal and regulatory considerations.
Understanding the local context isn’t just helpful, it’s essential to making a well-informed decision.
What Should You Do Before Making an Offer?
Before you make an offer, pause and pressure-test the deal:
- Do you fully understand what the contract allows the developer to do, and not do?
- Are you comfortable with their track record?
- Could you still complete the purchase if lending conditions changed?
- And most importantly, do you know exactly what you’re committing to, and what might change along the way?
If any of those answers feel uncertain, that’s usually where good legal advice makes the biggest difference.
Final Thoughts
Buying off the plans can be a strategic move, especially in a high-demand region like Central Otago where supply is tight and growth continues.
But it’s not a passive investment. You’re making a forward-looking commitment based on assumptions about the future, the market, the developer, and the build itself.
The goal isn’t to eliminate risk entirely.
It’s to understand it well enough that nothing catches you off guard later.
Because once the agreement is signed, your flexibility becomes limited, and the outcome is largely set in motion.
Working with experienced property lawyers, like the team at Checketts McKay Law, can help you navigate these risks early, review and negotiate contract terms, and ensure you’re making a fully informed decision before committing.
By Analise Cowie, Senior Solicitor