Using a Due Diligence Clause When Buying Off the Plans

Due Diligence can be seen as your “get out of jail free” card when used wisely.

Buying a property off the plans can be intimidating, especially if you’re a first-time investor staring down the barrel of a long, legally binding contract with a property developer.

The good news? You’re not flying blind.

There are tools built into most agreements that give you the ability to slow things down, do your homework, and make sure the deal stacks up.

One of the most powerful tools in your kit is the Due Diligence Clause.

What is a Due Diligence Clause?

In plain English: it’s your safety net.

A due diligence clause allows you to sign a contract and place the property “under offer,” without being locked into the purchase. You are essentially reserving the first right of refusal for the property.

You can walk away from the deal during the due diligence period (usually 10 working days), and in many cases, you don’t even need to give a reason.

Think of it as pressing pause. You secure the opportunity, but you still have time to validate everything behind the scenes - pricing, developer track record, rental yields, market conditions, and even renegotiate aspects of the deal.

It’s typically found in the Further Terms section of an off-the-plan Sales & Purchase Agreement.

Here's an example of a typical due diligence clause that would be in an off-the-plan contract:

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This is a typical due diligence clause you'd expect to see in an off-plan contract

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Here’s What Happens During Due Diligence

Once you’ve signed the contract and activated the due diligence clause:

• You work with your lawyer to comb through the agreement. They’ll flag red flags, negotiate improvements, and make sure you're not exposed to unnecessary risk.
  

• You review the financials: estimated yields, residence association fees, build timeline, and resale outlook.
  

• You might even negotiate perks - cashbacks, furniture packs, or pricing tweaks - especially if you spot leverage points during your research.
  

And if something doesn’t stack up? You can exit, no harm done.

Although most due diligence periods last for 10 working days, some might be shorter, and some might be longer. If you need more time to finalise everything, you can request an extension from the developer.

Why Legal Advice Is Crucial

Don’t assume your family lawyer who helped you with your home purchase can handle this.

Off-the-plan contracts are a different beast entirely. You want a solicitor who understands property development, sunset clauses, variations, and all the fine print buried in the Further Terms.

We work with a network of highly experienced lawyers who specialise in this area. We’re happy to refer you to one that suits your situation.

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How Can We Help You?

We help Kiwis build wealth through property investment. Our advisors will take the time to understand your individual needs and recommend suitable investment properties to help you build wealth and set up your retirement.

What Does This Look Like?

We use a 3-step process:

1. We start with a Discovery Meeting where we learn about you, your goals, etc., and you learn more about us.

2. This is followed by a Strategy Meeting where we model your retirement plan, understand key investment concepts, and briefly touch on some investment choices.

3. Finally, an Asset Selection Meeting where we discuss investment options in more detail and make any recommended adjustments based on what we now know about you.

Who Are We Right For?

We help people make smart investment choices and set up their futures. From first-time investors to experienced investors, we can cater to a wide range of people and help set up their futures through research-based property investment.

How Much Does It Cost?

Our advice is free to you! If you choose to invest, we’re paid by the property developer. This developer-paid model allows us to provide no-obligation property investment advice in New Zealand, without charging clients directly.

What Do We Do, And What Don't We Do?

What We Do

We offer end-to-end New Zealand property investment advice, helping Kiwi investors grow wealth through smart, data-led decisions. Our focus is on quality new builds in strong locations, tailored to your goals, guided by a team that knows the NZ market inside out.What We Don’t Do

We don’t do KiwiSaver, shares, cryptocurrency, or broad financial planning. Thrive is not a generalist firm. We specialise in property investment in New Zealand because that’s where we deliver the most value. By staying focused, we cut through the noise and help our clients make confident, well-informed property investment decisions.

How Do I Start?

Start the process now by booking a time to talk with our advisor by clicking here.