Off-the-plan panic at the chocolate factory

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Allegtions of “shape-shifting’ have raised their ugly face again, with a tale of off-the-plan owners not getting what they thought they had paid for when they finally moved into their new apartments.

The story on A Current Affair on Nine extensively quoted new home buyer Yang Yang who purchased a ground-floor unit off-the-plan in the Ramsgate Park development on the old Darrell Lea Factory site in Kogarah in 2017 and was looking forward to enjoying his 35 square metre private courtyard.

Instead he discovered on final inspection that more than half of it had disappeared, replaced by a common area nature strip..

“They didn’t update up with us at all. We waited nearly three years and they give us this common area. We are very, very disappointed,” he told A Current Affair.

Yang is one of a number of unhappy purchasers who bought into the scheme and are now contemplating getting together to take a class action against the developer JQZ.

“Shape-shifting” is our name for when the size and shape of the finished property is substantially different from what was paid for.

The problem for purchasers can range from being offered their deposits back when developers have squeezed extra apartments into the same floor plate, reducing the size of their new home.

This can happen a lot in a boom market, when the returned deposit buys a lot less real estate after two years have passed since the project was launched.

Or, alternatively, they may be told that there are conditions in their contract that allow the developer to alter the size or shape of the property within certain margins.

In the situation revealed by A Current Affair, one buyer paid $680,000 for an apartment with a private 37sqm terrace only to find that it had been replaced by a common garden area, full of plants with no fence.

Another, who claimed his 45sqm courtyard had been reduced to 12sqm, told JQZ he would be rescinding the purchase as per his sales contract as it was now more than a five per cent reduction in his lot.

JQZ disagreed, stating that the car space and storage cage were now included in his lot size, even though the original marketing material indicated otherwise.

After inquiries by A Current Affair, JQZ issued a statement saying:

“What a purchaser agrees to buy and a seller agrees to sell is set out in the contract – that way parties can understand what property is being bought and sold when the sale is “off the plan”.

“All specifications and expectations need to be (and are) clearly documented in each contract so that both buyer and seller understand their respective obligations.

“When selling property off the plan, developers need a degree of flexibility in the construction of the development as in most cases approvals are yet to be obtained and the details of Council’s and consultants (including engineers) requirements are yet to be set.

“Despite the need for some flexibility, our contracts maintain a right for the buyer to cancel their contract and get their deposit back in a range of circumstances. These promises are in writing and will be honoured.”

“In respect to the claims that certain lots sizes have changed, in the contracts the parties agree that if the size of the lot has been reduced by 5% or more, the buyer will have a right to cancel their contract and obtain a refund of the deposit.”

That’s all very well but disputes arise when the developers disagrees that the dimensions of the property have been changed by more than 5 per cent. In some cases at Ramsgate Park, some owners claim that storage and parking areas that weren’t counted as part of the pplan when they bought, are now being included, off-setting loss of total areas elsewhere.

When the developer and buyer can’t agree, as so often happens in strata – where there is less consumer protection on a home than on an electric toaster –  the buyer is faced with launching a court case to get what they thought they had paid for.

Ironically, this week the High Court in Canberra has made it harder for class action lawyers to “load up” their cases with many separate clients, making it in turn more difficult for ordinary consumers to join together to fight for their rights .

Buyer beware, indeed.

One Reply to “Off-the-plan panic at the chocolate factory”

  1. Avatar Jimmy-T says:

    This is now being discussed in the Flat Chat Forum

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