Home buyers have been warned to check that new residential developments have been approved by the local authorities before putting pen to paper and signing sales agreements.
Some buyers have accused developers of selling off-plan so that they can get finance up front, and then using a six-month opt out clause in the deed of sale to get out of contracts so that they can ask for substantially higher prices. The buyer, meanwhile, is left high and dry, after having lost months of capital appreciation.
Developers, however, say this provision in a deed of sale is intended to protect them from the delays which sometimes occur in the approval of plans and the "inevitable" cost of increases which occur from the time of signing to the start of construction.
Article in Business Report