In the marketing process your lawyer is your safety net. Ask them for an opinion on marketing material, use them to settle the agent’s appointment, and make sure that they’re in regular contact with the marketing team. If the market turns during the development phase, then inevitably some buyers will look at what was said to them during the marketing phase, to try to escape their contracts.
Property Development - 101 Tips
Before that critical first advance your pre-sales will be tested. That means at the least the pre-sales contracts, and the circumstances of their execution and current status, will be examined by lawyers engaged by your financier. While the financier’s lawyer will be looking for binding and effective contracts, sometimes they’ll raise issues to do with the precedent contract itself. A good idea is to tell your lawyer to clear the precedent contract with your financier’s lawyer before you start signing up your pre-sales.
When you get your development approval it’s critical that your whole team reads the conditions (all of them and not just those that relate to their area of expertise). They should then revert to you with any suggested changes or commentary. It’s not uncommon for local authorities to seek to insert conditions into a community management statement to uphold the intentions and desired outcomes of the development approval. In some cases, this can be unlawful and unenforceable. Your lawyer will likewise be able to tell you whether any of the conditions are likely to impact your sales process.
A layered community title scheme has distinct advantages but typically only where the uses within the layered arrangement are at least similar or complimentary. For example, long and short term residential accommodation. A development with markedly different uses such as commercial and long-term residential, can often benefit from being within a building management statement. A BMS is effectively a bundle of easements tied up in one document, that provides for access to shared facilities, the means of contributing to the maintenance and upkeep of those facilities and, in good BMS’s, dispute resolution mechanisms.
You have to acquire these too, including any associated intellectual property rights. Sometimes the value of the land is an existing approval or consent (for example a development approval, water allocation or statutory licence). It is surprising how many times these authorities, approvals or consents are not acquired, when they should be, as part of the purchase contract. It is a simple matter to insert a special condition to ensure that a given authority, approval or consent is transferred, or at worst case surrendered and a fresh one granted in the name of the buyer.