When purchasing an off-the-plan property in New South Wales (NSW), buyers often focus on the design, location, and potential rental returns. However, one crucial yet frequently overlooked aspect is the connection of essential utilities—electricity, water, gas, and internet. Delays or issues with utility connections can cause significant disruptions, leaving buyers unable to occupy or rent out their new property.
This article delves into the common problems buyers face with utility connections in off-the-plan developments, the legal options available to address these issues, and the potential financial and emotional toll on those caught in these situations.
Utility connections are essential for any property to be habitable. Without them, a property cannot be legally occupied or rented out. When buying off-the-plan, developers are responsible for ensuring that all necessary utility connections are completed before the handover of the property. However, in some cases, buyers are handed the keys to a property that is effectively "off the grid"—without functional electricity, water, gas, or internet.
Delays in utility connections can arise due to poor planning, bureaucratic issues, or simple negligence on the part of the developer. For buyers who have planned to move in or rent the property out immediately upon completion, these delays can be financially devastating, leading to extended periods of vacancy and lost rental income.
One particularly harrowing case involved a small business owner who purchased an off-the-plan apartment in Parramatta. She planned to move her family into the apartment while using one of the rooms as a home office for her growing online business. However, after the handover, she discovered that the apartment had no electricity or internet connection.
Despite contacting the developer and utility providers immediately, she was told that the necessary infrastructure had not yet been installed in the building. Weeks turned into months, and she was forced to delay her move-in date, rent an alternative office space, and pay for temporary accommodation for her family. The financial pressure mounted as her business began to suffer, and her personal and professional life fell into disarray.
For buyers who face utility connection issues, there are several legal options in NSW. The first step is to document the issue in writing, including any communication with the developer and utility providers. This evidence will be crucial if the matter needs to be escalated.
Buyers can lodge a formal complaint with NSW Fair Trading, which may mediate between the buyer and the developer to resolve the issue. If mediation fails, the matter can be escalated to the NSW Civil and Administrative Tribunal (NCAT), where buyers can seek compensation for losses incurred due to delayed utility connections. In more serious cases, such as those involving significant financial losses or safety risks, buyers may pursue legal action in the Supreme Court of NSW.
In the case of Re Estate of Harper [2022] NSWSC 903, a group of buyers purchased off-the-plan apartments in a high-rise development in Sydney’s inner west. The apartments were completed on schedule, but the buyers were unable to move in for over three months due to delays in connecting the water and electricity services. The developer had failed to coordinate with utility providers in time, leaving the entire building without basic services.
The buyers, many of whom had sold their previous homes or given notice on their rental properties, were left stranded. Some were forced to stay in hotels or rent temporary accommodation, while others had to move in with family members. The stress of the situation was compounded by the developer’s lack of communication and the uncertainty of when the utilities would be connected. For one couple, the delay meant they were paying both rent and mortgage payments for several months, leading to severe financial strain.
The group of buyers filed a joint lawsuit against the developer, claiming that the delay in utility connections constituted a breach of contract. The case was heard in the NSW Supreme Court, where the buyers argued that they had suffered financial losses due to the developer’s negligence in coordinating with utility providers. The court found in favor of the buyers, ruling that the developer had failed to meet its obligations under the contract.
The financial consequences of the case were significant. The buyers were awarded a total of $800,000 in compensation to cover the cost of alternative accommodation, lost rental income, and legal fees. However, the three-month delay had caused significant disruption to their lives, with some buyers reporting lasting emotional stress and financial hardship.