The developer is responsible for delivering the project, but the purchaser must also exercise diligence.
Question:
Before purchasing a property from an off-plan developer, it’s crucial to verify several aspects. Firstly, ensure the developer’s credibility and their capability to complete the project. Additionally, check if there’s a specified maximum period for project completion.
Answer: Some of the requirements to buy such a property are:
a. Ensure that the property is clear of any debts, such as mortgages or charges, and that the developer possesses all necessary approvals from competent authorities (DLD, RERA, registered escrow account) to commence construction.
b. Conduct thorough research on the developer before purchasing off-plan property to verify their established and reliable reputation. Review their track record with previous projects.
c. Include appropriate clauses in your sale and purchase agreement that outline terms and conditions, govern the relationship between parties, and specify their respective rights and obligations. This ensures understanding of your duties, rights, and especially if there is a delay beyond the agreed period.
Verification of the developer’s credibility can only be done through the DLD, registered escrow account, and RERA.
What about the project timeline?
The completion of the project must be agreed upon by both parties in the purchase agreement, with a reasonable timeframe specified. If the sales contract lacks a specific completion and delivery date, the developer cannot indefinitely delay completion. The courts, guided by the ruling in Cassation No. 328/2023 of Real Estate, have the authority to determine a suitable timeframe if necessary.
The completion and delivery of units to the buyer in an off-plan sale are obligatory for the developer, irrespective of whether the sales contract specifies a completion date. This requirement ensures that the seller cannot indefinitely delay completing the project and delivering the units.
