Property Development & Services to Property Developers
We have many years experience of providing comprehensive legal services for the undertaking of property development projects – from the initial sourcing of the land through to the sale settlement of the finished product, whether residential land, residential houses, town houses, residential apartments, commercial suites, industrial sheds or industrial land.
We are able to provide services to you that you can rely on to ensure your development is not held up by the lack of organisation, full resourcing or know how of your legal advisers.
We can offer fixed pricing based on your project – in writing – that we will adhere to. We will need to ask you a number of questions to understand your project so that we can offer fixed pricing.
Frequently Asked Questions about the legal process for Property Development >
We provide here a basic commercial summary of the legal steps involved. We are happy to discuss you r development project at no cost to you for the first hour of consultation – to assist you with any questions or concerns you may have (this offer is not able to be made to single residential dwelling build projects).
What are the legal steps?
- Source land
- Purchase land – contract is usually subject to due diligence and development approval conditions prior to settlement
- Development approval through council
- Operational works approval
- Undertake works
- Survey and other titling documents prepared
- Survey and titling documents registered at land titles office
- Registration and settlement of land sales
- What are some of the legal instruments needed to be developed and supplied ?
There are many different instruments that can assist a developer to achieve their project in the manner they want. Different developers will have differnt project structure and needs depending on their circumstances including their funding methods (bank and equity split) types of investors, tax situation, whether they are working with a land owner or own the land themselves etc. etc.
We have significant experience of providing business structuring advice and implementation services as well as property development legal services to a number of Property Developers.
Some of the types of legal instruments we may advise for use, in different developer cirucmstances, have in the past been:
- Builders terms land access agreements
- Building contacts with special terms between builder and developers
- Development agreements with land owners with special terms for payment and clarity around settlement, GST, WIP, Development Fee, Income Tax etc.
- Pre-Sale agreements for buyers that are binding due to accurate representations made (some fall over at settlement if not able to be relied on if not drafted well)
- Put and call option agreements (over property)
- Off the plan contracts
- Joint venture agreements
- Easement documents
- Land use agreements
- Unit Trust Unitholders Agreements
What are some of the common pitfalls in Property Development Projects?
Assuming that the developer has professional financial mangement and budgeting, and the property cycle does not change in a way not expected or planned for by a developer and their investors, the risks can be summarised as build (build budget and timeframe) risk and market (sale price and volume) risk.
Major bank financiers are well aware of these risks and will not fund you without care in these areas. Their funding approval process requires benchmarks be achieved in the project documetnation and review by independent Quantity Surveyors and Valuers, including land and contruction contract. However there is little you can do in the event of new supply of stock competing with your stock and coming on the market at the same time as your project. Unless your projecty has some competitive advantage for example, in the way of relatively hard to substitute features or a very low cost.
Sometimes you cannot predict what engineering problems you may have along the way or delays with subcontractor trades staying on time and on the job. However you can in the latter case ensure you have legal rights to manage these risks by removing them from the site if they are not performing.
More technical matters, that can undermine an otherwise good project that meets these other requirements of a project (a competitive advantage, and reliable builders and suppliers and a capacity and the ability to hold them accountable), are:
Development approvals on unfavourable terms
Incorrect disclosure in off the plan contracts
Non binding settlement contracts
Unenforceable land contracts
Non disclosure of legislatively required disclosures which void contracts (eg environmental land register)
Documents that do not correctly record tax and GST treatments
What can we do to assist to prevent these problems?
We recommend consultation and discussions with us as to the entire process and planning for whole of the development - at the start of the project - if this is possible. It is important so that we understand the project commercially, and your objectives and plans, investors, funding requirements etc. This enables us to raise issues and solutions to prevent problems (we have a lot of experience that you can tap into this way).
Another way to prevent problems is to engage us to consult with your other specialists so that we can discuss matters with them directly. We can save time and reduce uncertainty if we can draft documents in consultion with other practitioners – surveyors, planners, enginees, builders etc. etc.
High Density Property Development
High density building development has some additional issues to those raised immediately above.
A Body Corporate must be created by registration of a Community Management Statement. All Body Corporate requirements are then handled by the Body Corporate Manager.
We also need to ensure that the appropriate Body Corporate Managers Agreement, Management Agreement, and Letting Agreements, as well as Body Corporate Budget disclosure is also recorded properly in the disclosure statement annexed to the contract document for sales.
Due to the time it takes to build high density residential property buyer deposits are norally held for a long time frame. These should be invested to ensure that the parties benefit from the deposits being held for a significant period of time and are held in solicitors trust account. We provide these services as a matter of routine.