Mastering the OTP Purchase: A Comprehensive Guide to the Property Settlement Process

Embarking on an Off the Plans (OTP) purchase can be an exciting journey towards owning a brand new home. However, navigating the settlement process can sometimes feel complex and challenging. From understanding the significance of the property title and code compliance certificate (CCC) to preparing for the loan drawdown, there’s a lot you need to know. In , we’ll explore all the crucial steps of the settlement process, offering expert legal advice to ensure a smooth OTP buying experience.


Most banks require you to obtain a completion certificate from a valuer for the finished house. In certain situations, if you receive notification that settlement is imminent and the house construction is complete, you can complete this process even before triggering the settlement. However, most banks generally demand the valuation certificate before issuing loan documents. Your lawyer can supply additional necessary documents, such as the Record of Title and CCC.

Title Checks

Once the new title to your property issues, your lawyer should check it for any unexpected interests.  Although you typically can’t challenge the interests registered on your title, it’s wise to seek advice if you encounter something unexpected before you proceed with the settlement. This is also a good opportunity to check whether the area of your property is different from the initial estimates in the plans and specifications and what are your obligations going forward.  Most new developments have a residents’ society or body corporate so there will be covenants or rules registered on the title that you must abide by.

The paperwork

Once the settlement starts, you or your lawyer must instantly reach out to your bank or broker for the required loan documents. Your bank may have specific prerequisites to meet before providing these documents.

Additionally, you need to secure insurance for the property. Discuss with your lawyer to ensure the insured sum fits your and your bank’s requirements, and ask for an insurance certificate noting your bank as the first mortgagee. Particularly if there’s a body corporate or residents’ society, your lawyer can assist, as these entities may handle insurance. Failure to provide this certificate before settlement prevents the bank from advancing the loan.

If you plan to buy via a trust or company, this entity needs its own IRD number. Without it, settlement can’t happen.

After loan documents issuance, schedule a meeting with your lawyer to sign the crucial transfer and loan documents. Some banks permit electronic signing. If you plan to be out of the country, notify your lawyer promptly due to the brief signing window.

Pre-settlement Inspection

Use your pre-settlement inspection as an opportunity to thoroughly check the property at least five days before the settlement date. Make sure things like lights, hot water, and garage door openers are functioning, and all construction work is finished. Expect to find minor defects, such as paint touch-ups.

While the seller doesn’t have to fix every issue before settlement, this period should allow enough time to address significant concerns or make necessary plans. Notifying the builder of required changes and keeping a record of any defects found during your inspection is essential.

Remember, the pre-settlement inspection takes time; it’s not something you should rush.

Settlement Day

Settlement signifies the formal ownership transfer and property possession. You can only access the property once your lawyer gets the bank-cleared funds from you and any lender, which then get sent to the developer’s lawyer. With various factors beyond your lawyer’s control, settlement might happen anytime, possibly as late as 5.00pm.

Once the developer’s lawyer gets the funds, you can collect your keys or key codes. If you don’t settle on the scheduled day, expect the developer to charge penalty interest. The penalty’s amount is based on the contract-specified rate and purchase price, usually amounting to hundreds of dollars daily.

Post Settlement

A new build can often have minor snags and work that is not up to standard.  These do not necessarily have to be rectified by settlement and you cannot delay settlement or claim compensation for these reasons.  However, as noted in our previous article, under the Building Act, a builder is obligated to rectify and address any defects discovered within the first 12 months following practical completion. You should be careful to ensure that you notify your developer of all defects as soon as possible.  

Expert advice

Settlement is exciting, yet the path can be intricate. Expert advice simplifies OTP buying. Lawyers identify risks and resolve issues, ensuring a smooth settlement. For OTP purchase advice, call Henderson Reeves Lawyers at 09 281 3723.

If you need advice on purchasing OTP, please call one of our OTP property experts Shelley, Pierre, or Amie at Henderson Reeves Lawyers 09 281 3723.