It is typical for an off the plan contract of sale to provide that the purchaser will reimburse the vendor / developer’s costs of connecting services.
Typically, the developer asks for the costs of connecting the electricity and not much more.
I think this is a missed opportunity for many developers. A little more planning could see thousands of additional dollars recovered on an average 4 unit development.
Additional planning could take a number of forms:
- Including connection fees as a distinct item in your budget / feasibility;
- Asking your solicitor to make sure that the relevant clause in the contract is drafted broadly enough to maximise the connection fees recovered; and
- Making sure that the appropriate receipts and records are available so that these amounts can be recovered at settlement.
Clearly, there are limits to this approach. I don’t think many purchasers would accept that the cost of running a gas line to the property should be included as a connection fee. In some cases, the promise of a fixed all inclusive price may be part of your marketing.
However, I believe many developers are unknowingly leaving money on the table in this area.
At Lewis O’Brien & Associates we take the time to make sure that your off the plan contract maximises the money received by the developer at settlement – in addition to attending to the compliance issues and flexibility required for development projects. Please contact us to discuss your next off the plan contract.