Most people don’t show too much concern when it comes to buying new and uncompleted condos simply because they don’t expect anything to go wrong. Popular belief makes property buyers comfortable in the fact that the risk of a developer delaying a project is almost non-existent. However, sometimes the worst nightmare to any property buyer could happen when it comes to buying new and uncompleted condos.
The Laurel Tree and Sycamore Tree are great examples of incidents when delays become a huge nightmare for property buyers. These condos were supposed to get occupancy permits in 2016 but to date, they are still under construction with completion being indefinitely delayed. Both home buyers and investors are greatly affected due to these delays. Investors can’t rent out units that are pretty much non-existent while homeowners pay huge mortgage bills for what can simply be referred to as unlivable concrete shells.
It is quite clear that you should be cautious when buying new and completed condos. However lucrative the opportunity may seem like at the time, you should always be preemptive.
Below are what you need to know when you decide to buy new and uncompleted condos.
1) Ensure you have at least a six-month financial buffer first
When buying an uncompleted property, you need to know that there is pretty much very little you could do should there be defects, delays, or other unforeseen issues. Yes, you may resort to writing in newspapers or threatening legal action, but all this will bear no fruits. This is because the main reasons developers abandon projects are usually because of the main contractor filing for bankruptcy, or there is a litigation problem.
It is therefore important that you have a solid financial buffer that can last you at least six months before you buy any new and uncompleted condo. You must ensure that you have sufficient savings to help you cater for costs such as temporary accommodation and property loan, in case something goes wrong with your investment.
Six months is a good buffer period to help you look for alternative plans should the new unfinished condo encounter any problems. This is particularly important when you have a family.
2) Ask what your options are in case of delays
Ensure that you ask what your developer will do if there are any delays to the new and uncompleted condo project. A good developer should present a vivid contingency plan to you, immediately you ask the question. Once you know the developer’s contingency plan, you will then plan your finances to cater for any delays.
Remember that once you sign the contract it is binding and your options are left limited. Ask as many questions as possible until you feel comfortable with buying new launch and uncompleted condo.
3) Don’t just look up the developer, the main contractor is also equally important
Most people simply look up the developer and leave it at that. Yes, the developer may have a good track record but this does not mean that they are the safest option. Remember that developers depend on contractors and subcontractors to get the job done on time.
Should anything go wrong, the developer will usually ask you to sue the contractor and this won’t help your case. You must consider the main contractor first before buying new condo and uncompleted condo.
Ensure that you go through your contract thoroughly checking the defects free period to identify what is covered and what is not covered. Once you follow the steps above, you can move ahead to buy your new and uncompleted condo.