When entering into any contract for the purchase of property, it is important to ensure that all bases are covered and both parties know what is expected from them. When purchasing a property for redevelopment, there are a few extra steps that buyers should take to ensure they are aware of how they can deal with land they are looking to develop. Developers should seek additional advice and information about the property, as well as ensuring allowances are made in their contracts, so they are not faced with any nasty surprises after settlement.
In any contractual negotiations, conducting due diligence to ascertain as much information on a property as possible is crucial. Here at OMB Solicitors, it is standard practice to include various searches in our conveyance of purchase matters. Where property is purchased for redevelopment however, we recommend to our clients that specific searches and additional expert advice is also sought. It is important that such information is gathered, so that any restrictions or issues with the property which may affect redevelopment are brought to light. Seeking review and recommendation from sources, including but not limited to, town planners, engineers and surveyors for example, allows purchasers to have the greatest understanding of the lengths and limitations a development project may encounter.
Another tool we suggest prospective developers consider is the Gold Coast City Council’s ‘City Plan‘. The City Plan outlines, maintains and protects the Gold Coast community’s intentions for future development. A crucial part of the City Plan which developers must consider is zoning. Zoning is the categorical assignment of areas around the Gold Coast into ‘zones’ which ultimately affect how land can be used and (re)developed. It is important that developers consider the zone property is located within so they are aware of the restrictions and requirements which may be enforced.
Not only should developers conduct such due diligence, they should also ensure that their contract provide allowances so this information can be sought prior to a developer being locked into a deal. Special Conditions can be included in contracts so that purchasers have time to conduct these investigations and terminate a contract without penalty in the event the due diligence does not stack up.
The inclusion of special conditions which stipulate the contract to be ‘subject to’ the satisfaction or undergoing of such searches or research should be a non-negotiable term of a contract if a developer is planning to redevelop a parcel of land. If these additions and changes are not made to contracts, purchasers may find themselves in breach where they have taken excess time to meet conditions, or unable to terminate a contract if the property can not be used as envisioned.
Redeveloping property can be a rewarding and exciting time for purchasers. It is important however, that due diligence is undertaken, and proper additions are made to contracts so that pitfalls can be avoided. Seeking expert advice is crucial to ensure that property can be developed as proposed. Ensuring that contracts reflect the intentions and expectations of both parties is also fundamental in achieving a successful outcome for all involved.
Contact Jessica Thomas today if you need any further advice on the preliminary actions that should be taken when redeveloping property, or if you would like to find out more about how contracts can be drafted to suit your redevelopment needs.