Potential Risks With Off The Plan Purchases
Courtesy Sydney Morning Herald - September 8, 2013
Eamonn Duff, Sun-Herald senior investigative writer
One of Australia's leading developers has lost a bitter war with investors after it attempted to alter the floor plan of their luxury apartment complex to house a religious movement founded and managed by its own chief executive.
Crown Group sold a vision of six-star living at its future $80 million Viking development in Sydney's Green Square, using artists' images depicting a Ferrari showroom occupying the ground-floor space. With the pledge from Crown that both bottom floors would be occupied by high-end retail, more than 75 per cent of the 114 luxury apartments were snapped up off the plan for between $475,000 and $1.3 million.
However, one of those investors chanced upon a revised development application, for the same address, on the City of Sydney council website. Under a drastic series of changes to the original plan, both the ground-floor and first-floor commercial tenancies were to be fitted out as a ''place of public worship'', including an adjoining conference centre and function space capable of hosting 300 people, from 7.30am until 10.30pm, seven days a week.
The religious group set to move into the $3.6 million space was Sydney Christian Worship Centre, whose founder and head pastor is Crown's founder and boss, Iwan Sunito.
Last week, City of Sydney council rejected the proposal. It said it ''shared'' investors' concerns they had been ''misled by the developer''.
Sydney investor Dennis Colquitt, who bought off the plan in 2010, said buyers felt ''vindicated''.
''We all bought into a luxury development because that's how it was promoted to us, not a block of flats propped above a church and conference centre,'' he said.
On the SCWC website, Mr Sunito is described as ''the visionary behind Australia's leading property group, built from nothing to $2.5 billion of developments''. He has developed his church group into a thriving Christian movement, which has ties in Indonesia and beyond.
Each month, SCWC organises up to 30 events that range from Christian musical spectaculars and ''healing and miracle'' evenings to business leadership functions often hosted by Mr Sunito.
Two weeks after the altered development application had been lodged with the council, Crown sent a letter advising investors of the proposed changes, arguing the church facilities would ''enhance'' the development. But, in the three weeks that the application was publicly exhibited, the council was flooded with 146 objections not only from buyers but the community. Crown refused to comment.
This case highlights the potential risks associated with ‘off the plan contracts’. In purchasing a property off the plan, it is vital that prospective purchasers carefully examine the Contract with their Lawyer to ensure that they are fully aware of the terms and conditions surrounding the purchase. Quite often, the Contracts which have been prepared by the Developer contain all sorts of clauses which give the Developer the ability to make changes to aspects relating to the property being purchased and also they usually have the power to extend the time for completion beyond the anticipated completion date.
These changes can often be detrimental to the unsuspecting purchaser and it is therefore wise to review and examine these clauses with a Lawyer before Contracts have been exchanged to enable amendments to be sought to the Contract to better suit the interests of the purchaser.