BondCredit.co.za

Before buying a home “off-plan” or buying a “plot-and-plan” home, there are important risks to consider. There may be various risks involved and this is how you can safeguard yourself:

Few disadvantages of buying Plot and Plan

Buyers have difficulty in visualising the size and exact interior layout of the property. The picture you have in mind (following the flashy brochure advertising the development) may not always be what the development turns out to be.

Read the contract to ensure that strict guarantees are in place and that the developers cannot change the layout once they start building.

There is not always a fixed date for completion and there are usually delays in completion by factors of bad weather, municipal approvals or developer running in financial difficulty. The job may not be finished in time with the specified period, in order for you to take occupation. You may end up fighting lengthy, costly legal battles due to developer/builder cash flow problems

There is a possibility that you could be sold short of the quality of finishes you initially signed for.The developer that sold you the “plot-and-plan” may sequestrate or liquidate before completion of the project.

You then need to find a builder who will complete the project, and you may end up paying more than you bargained for because he may quote differently or use different materials or purchase his stock at different prices, and so on.

You may be one of the first owners in the development to move in. You may be surrounded by the building operations of the rest of the uncompleted units for quite some time. You will need to landscape your garden from scratch.

Few advantages of Plot and Plan

Usually only 10 percent deposit is payable. Buyer’s responsibility towards bond repayments delayed for 18-24 months. In that period the value of the investment can grow substantially. Transfer duty only be payable on purchase amount of the plot and not the building agreement amount.

Servicing Your Vacant Stand.

Please keep in mind that you have to budget for servicing the bill from the local council and body corporate or home owners association (if any) on your stand, even though there are no improvements on it yet. As soon as the stand is registered in your name, you are liable for paying the rates and taxes and any levies, no matter how long you take to start building on it.

Professional Advice & Services.

You need expert advice. It is worth paying for a professional now, as this may save you a substantial amount later. Make sure you consult with reputable architects, quantity surveyors, development consultants, building contractors, plumbers electricians, and so on.

A Quantity surveyor is a financial consultant who specialises in the construction industry whose training and experience qualifies him to advise you on costs and contractual arrangements and to prepare contract documents.

He acts in liaison with architects, consulting engineers and contractors to safeguard the client’s interest. He is an independent expert who operate in a specialised area of the construction industry.

The title quantity surveyor was reserved under the Quantity Surveyors’ Act of 1970 for exclusive use by those who had obtained the necessary qualifications and experience prescribed under the Act.

In terms of it, such persons must register with the South African Council for Quantity Surveyors before they may offer their service as consultants to the public. For more information on Quantity Surveyors, please visit www.sacqsp.org.za and www.asaqs.co.za

An Architect will design your home to your specifications and budget. Once you have approved the plans, he will submit them to the NHBRC for approval and take care of all the other architectural requirements. The architect can also manage the building process for you and take responsibility for authorising process payments from the bank to the building contractor.

A Building Engineer will, after the architect has designed your home, design the foundations for the house according to the grading of the ground. He will also design the upper storeys’ floor slabs and the stairs.

Either the builder of the engineer will then build these structures, but it is ultimately the engineer’s responsibility, and he has to make sure that these structures are built according to standard.

The Building Contractor should be registered with the NHBRC. Although, Do not rely on the NHBRC for recourse against bad workmanship by a builder or developer. An NHBRC warranty certificate is only proof of enrolment with the NHBRC. It is not a guarantee of good workmanship, and it does not cover all building defects.

It is valid for five years and after three months from the date of occupation it covers structuraldefects only. Find out what other homes were built by the builder. Visiting as many of these homes possible and try to view one or two of them. Talk to the owners and find out what their experiences were with the builder. The same applies for any other contractors like plumbers, electricians, and so on.

Building Contract Facilitators.

These are companies who liaise with owner-builders, architects and builders (including any sub-contractors, used by the builders) throughout the building project to ensure that the project is completed according to the highest standard.

They facilitate the owner-builder in selecting finishes, which in turn facilitates builders in terms of getting the project completed timeously. From tendering for quotations to arranging samples of products such as tiles, lighting and many other finishes for the owner-builder to make their selections at their leisure.

They can also assist with finance applications, the marketing & sales of the finished home, management of the entire project, interior design an even sometimes garden landscaping.