Strata Tip #79: Settlement – Be good to your Agent
September 6, 2021
When preparing for settlement, make sure you have received all the necessary invoices from your Agent, you have clarified (in advance) any issues with the
When preparing for settlement, make sure you have received all the necessary invoices from your Agent, you have clarified (in advance) any issues with the
That’s so you know that construction is on track, as are your costs. If construction is not running to budget or you fear a discrepancy,
#101 Strata Legal Tips …Strata Property Development Tip #77
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
Interview a couple of development lawyers and don’t make the mistake of thinking that the cheapest will be the best. As in all things, you
When you conducted the first extraordinary general meeting of the body corporate, you would have knocked over the usual agenda items such as insurance, initial
You should stay away from settlement; avoid watching the process and simply enjoy the outcome! Whether it’s settlements being rescheduled, buyers losing their transfer documents,
Henry Ford once said that ‘you can have the car in any colour you like as long as it’s black’. Providing options for finishes will
Whether it’s a change to your standard conditions, a due diligence clause or making their purchase subject to their sale, you can expect a number
A good marketing agent is not only a salesperson, they’re an advocate, marketer and public relations officer. These days, they also need a little dash
Most construction finance facilities contain conditions regarding pre-sales. That is, the number of “off the plan” sales contracts that need to be achieved before the
Most local authorities offer a pre-lodgement meeting, at which your intentions can be discussed and Council’s concerns can be raised in an open, robust and
Separate different uses physically, and if possible legally. In community title schemes opposites do not attract. The archetypal dispute ridden complex is the one that
You can use a special condition to achieve just about anything you need. There are common special conditions, such as due diligence, and more unusual
Aside from checking your numbers, your accountant will keep everything square for the tax man. There is nothing worse than unwittingly putting a foot wrong
If your contract was written correctly, then there should have been either no land tax adjustment required at settlement or a minimal adjustment. The Office
In advance of settlement you need to get together all of the keys, codes, warranty certificates, product manuals and other paperwork that your buyers are
However well designed your project there will be variations. Whether it’s accommodating the needs of particular buyers through a change of specifications, taking advantage of
If you’re going to use more than one sales team then they have to have clearly demarked areas (for example stock) and they all need
If you establish a brand, deliver a quality product and a hassle free experience for your buyers, then you will have a ready made second
A great development idea is just that … until you have the development approval. The bank’s valuers do not value potential, they ascertain the property’s
Two decades ago there was a revolution in planning law. Out the window went prescriptive standards and in came performance-based solutions. In most cases, developers
The schedule of by-laws from the Act are not good enough. Neither should the surveyor be the sole voice determining what areas will be on
The standard conditions are the Holden Commodore of the legal world. Not very exciting but in most cases they get the job done. The standard
Consider engaging the best local town planner you can find. While the large multi-state or international firms will attract high quality people, good local town
All going well you will have adjusted for body corporate contributions (levies) at settlement. In the best case, contributions have not commenced until after the
When reviewing your draft settlement statement, you’ll get a warm glow – thinking about the money you’re about to make. Don’t be surprised however, if
Whether it’s a $300,000 build or a $30m build, understand when payments fall due, what the pre-conditions to payment are and how the payments must
You don’t get a second chance to make a first impression. Your contract package should be professionally presented, easy to read, logically arranged and very
It’s almost a given that you will use some form of online marketing, whether the obligatory development website or something more esoteric. You can (cheaply)
There is no longer a 10% limit on deposits for off the plan strata sales. You can take up to a 20% deposit without the
If you don’t know the steps in the development approval process, then there is simply no way that you’ll be able to extract the best
Make the user pay for the use of the facilities that they get access to – typically facilities will be on title, within exclusive use
The contract reflects the bargain between the parties and it’s critical that it reflects all of the bargain between the parties. Pre-contractual negotiations are superseded
Sovereign risk is the risk arising from having to deal with the relevant governments having power over a development. A “pro-development” council will always be
Until your buyer lodges a BCCM Form 8 with the body corporate manager, you’ll still be recorded as the owner of the lot. That includes
If your lawyer is suggesting a retention to help a settlement across the line that usually means the contracts prepared by that lawyer could be
Even the best work sites can run into trouble. Industrial action, sub-contractor disputes or workplace accidents; there are many more potential causes of delay than
People don’t value things they don’t pay for. The law around holding deposits can however be tricky. If you take a holding deposit you should
Ordinary Australians give away more private information than ever before. This means that you can tailor your message, once you have identified your target market.
It does not matter how well you think your development stacks up, you won’t get finance unless you can make the business case. Spreadsheets are
Just because you have obtained a development approval for a similar development in the past does not mean the development approval process will be the
Bodies corporate have statutory obligations to maintain the common property and body corporate assets. Whatever you, as the developer, bestow upon the body corporate as
A lot of agents will prefer that you sign a non-binding offer & acceptance document rather than proceeding straight to contract. The idea is for
With the advent of ‘dial before you dig’, Google Earth and Qld Globe you can obtain a wealth of information without even leaving your office.
You’ve now accepted that there will be defects. What’s the best way to manage them? Different project teams (developer, architect and builder) will have different
Ask your lawyer for a draft settlement statement before they’re issued to the buyers for settlement. If you can’t understand the draft statement easily and
Unless you’re acting as your own project manager, stay offsite and let the professionals get on with their jobs. Arrange inspections by all means but
Binding expressions of interest can cause more trouble than what they’re worth. Don’t listen to agents that tell you that if it’s not binding, or
Print, radio and TV. Most real estate agents will tell you that combining at least one of the traditional media with new media will generate
Property development is inherently risky. The riskier the activity the more reward required to justify it. Developer’s margins of 20-40% are normal and expected. If
For any given development the relevant planning scheme and the planning law will prescribe that a certain number of development approvals are required. Of course,
If you don’t want a porridge design (bland but does the job) then be a patron. Give your architect some free rein. After all that’s
Sometimes there will be pre-conditions to your purchase. For example, you might need to get your structure in place or obtain a ‘speculative’ development approval.
You cannot appreciate the site unless you’ve walked all over it. That firsthand knowledge will set up almost everything you do from that point on,
Defects are a part of life – no matter how good your builder there will always be defects. Just like that broccoli on your plate
Understand the process – discuss the settlement process with your lawyer and make sure you understand it. That way you will have realistic expectations and
Who’s your project manager? – Have you engaged an engineer or a professional project manager to oversee for you? If you’ve got building experience are
Appoint your agent properly – your agent needs to be appointed in writing using the right form. Most agents will present one to you and
A picture speaks a thousand words, a YouTube video invites a million clicks – professionally prepared drawings are the minimum expectation that your buyers will
Nett present value and the internal rate of return – if you don’t know what these concepts are, learn … and fast! If you are
Use a local town planner – local town planners will have experience with the planning scheme that you’re trying to get your approval under. They’ll
Architect vs draftsman – if you’ve got building experience, you have project management experience or your development is (very) simple then a draftsman may be
GST – make sure you get advice on the GST issues before you sign the contract. GST is an issue that can fall between your
Checklists are great – if you’re an experienced property developer you will probably have a range of checklists. If you’re an inexperienced developer your lawyer
You’ve got the money, but – every buyer is part of your future potential sales force. Word of mouth will sell you almost as many
Can I please extend? – You’ll be asked for extensions even before you give notice to settle! What is your policy going to be? Try
Know your builder – whether you have an existing relationship with a builder or you’re just starting out, you need to know your builder better
One agent or many? – This will depend on your product, but it’s a question you should always ask. One agent is easier to control
Chaos vs. control – get Smart and get a marketing plan, follow the plan and be consistent. If you tell your agents what to say
Understand the options – bank financing is just one pathway. There are other providers and you should consider what they have to offer.
Push the envelope not the red button – most local authorities expect developers to push the envelope. Don’t be surprised however, if they push back
Who is your buyer? – If you’re a property developer you’re in the business of creating property people want to buy. Think about these things…
You make your money when you buy not when you sell – if you can’t get the site for the right price then you put
Use the free tools – Queensland globe https://www.business.qld.gov.au/business/support-tools-grants/services/mapping-data-imagery/queensland-globe is an excellent source of information that you can use to check out potential development sites.
