By Julian & Renee (Australia) – with writing support from Alberto Aldana (Colombia)
In New South Wales, there are certain unique challenges and risks that come with off-the-plan contracts. Buyers who are not aware of the legalities surrounding the Occupation Certificate (OC) are particularly exposed to risk. This is a significant aspect of the property transaction process which can directly impact your settlement timing and whether or not you end up with the property itself. At Flash Conveyancing, we always tell our clients to get a good grasp of the legalities behind this and other off-the-plan issues to avoid surprises later on.
In an off-the-plan contract, the Occupation Certificate is the point of no return. Essentially, once the OC is issued, you are legally obligated to proceed with settlement. The OC is a document issued either by a private certifier or the local council that certifies the building is ‘fit for occupation.’ It is this certificate that binds you to settle and move forward with the transaction. Typically, settlement must occur within 14-21 days of the OC being issued.
For some buyers, this can become a trap. Buyers may not have fully inspected the property or might be unhappy with certain issues, like minor defects. However, the law does not allow for any delay on the buyer’s side once the OC is issued. If you refuse to settle or try to back out due to minor issues, you risk forfeiting your 10% deposit and can even face legal action for damages.
A crucial aspect of an off-the-plan purchase is the Defect Liability Period, which usually spans 90 days after settlement. During this period, buyers can submit a list of defects that need to be addressed. The issue, however, is that most contracts allow only a single list of defects. So, if more problems arise after the first list has been submitted, the builder is under no obligation to fix them. Therefore, it is essential to conduct a thorough inspection and wait as long as possible—at least until day 80—before submitting your defect report. This ensures you don’t miss any hidden issues.
From the vendor’s side, developers are required to comply with the provisions outlined in the agreement, ensuring that the building meets all the necessary standards before the OC is issued. However, once the OC is issued, the developer will often request a quick settlement. If the buyer is not satisfied with the condition of the property or if the developer refuses to fix reported defects, disputes can arise. In such cases, buyers have the option to take the matter to arbitration or to the NSW Civil and Administrative Tribunal (NCAT).
Both arbitration and NCAT proceedings can be time-consuming and expensive, which is why it’s important to have legal professionals involved in the process. Having the right guidance throughout these steps can help avoid unnecessary delays and ensure that your rights as a buyer are protected.
At Flash Conveyancing, we only work with reputable agents and developers who fully understand the legal intricacies of the property transaction process. Our team’s expertise in navigating local councils such as Blacktown, Hawkesbury, Blue Mountains, and other areas, along with our deep knowledge of NSW property laws, ensures that every settlement is smooth, transparent, and efficient. Whether you’re purchasing your first home or reviewing an investment property, we are here to provide you with a seamless experience, helping you make informed decisions with confidence and peace of mind.
Our team has a proven track record of working seamlessly with the Blacktown, Hawkesbury, Blue Mountains, The Hills Shire, Hornsby, and Parramatta councils.
North-West Growth Corridor: Marsden Park, Box Hill, Schofields, Tallawong, Riverstone, Gables, Melonba, Grantham Farm, and Angus.
The Hills District & Surrounds: Castle Hill, Kellyville, North Kellyville, Bella Vista, Baulkham Hills, Beaumont Hills, Norwest, Rouse Hill, Winston Hills, and Westmead.
Blacktown City & Established West: Blacktown, Seven Hills, Glendenning, Glenwood, Stanhope Gardens, The Ponds, Quakers Hill, Kings Langley, Parklea, Acacia Gardens, Arndell Park, Rooty Hill, and Doonside.
Hawkesbury & Lifestyle Estates: Dural, Middle Dural, Kenthurst, Glenhaven, Galston, Glenorie, Annangrove, Nelson, Cattai, Maraylya, Vineyard, and Windsor.
Parramatta & Emerging Hubs: Parramatta, Northmead, North Rocks, North Parramatta, Wentworthville, and St Marys.