Buying ‘off the plan' is when properties are advertised for sale before they’ve been built. You may be able to inspect a demonstration property to get a sense of the final product.
What your developer must do
If building work hasn’t yet started, your developer isn’t required to provide proof of HBC cover.
What is important is that your contract with the developer must state that:
- There is an exemption from the requirement to provide proof of HBC cover
- HBC cover will be in place before the start of work
- They will provide you (the buyer) with proof of HBC cover within 14 days of the cover being taken out
- You (the buyer) can cancel the contract for sale before settlement if the proof of HBC cover is not provided within 14 days of the cover being taken out
You should also look at clause 61 of the Home Building Regulation 2014 which sets out the requirements in detail.
If building work has started, a copy of their proof of HBC cover must be attached to the contract for sale.
The developer does not need to provide proof of HBC cover for construction of a multi-storey building that is more than three storeys and contains at least two separate dwellings. See the Home Building Regulation 2014 (particularly clause 56) to get a full explanation of how a 'multi-storey building' is defined under the legislation.
You can check the validity of a builder's or tradesperson's certificate of HBC cover by using the HBC Check.
Warning to buyers
A contract could be completed before the building work is finished and before any HBC cover is taken out.
Where a contract for sale is completed and settled, the legal right to cancel the contract no longer applies.
When you buy off the plan, you are paying for a property where the end product may not only differ from your expectations, but be worth less than what you originally paid by the time it is finished.
If you are thinking of entering into a contract to buy premises not yet built, exercise caution and consider getting legal and other advice before signing any documents or paying any money.
Making a claim
Visit making a claim for more information on the full claims process.