Urban Land and Housing – Delays by developers to get projects registered

So much land (and property) these days is sold ‘off the plan’. This means that the purchaser (you) are entering into a contract to buy a property which doesn’t yet actually exist yet.

This method of purchase has so many benefits as you are able to secure the property today, but not have to actually pay for it for many months (sometimes up to 18 months).

Additional benefits are that you have time to sell your existing home, have time to save more money, and often the price may rise between the time of exchange of contracts (securing the property ) to settlement (payment and transfer of property into your name).

Many developers will accept deposit bonds and bank guarantees which mean you have to come up with even less ‘hurt’ money to secure the property.

A great deal right!

Well often so……

However, sometimes purchasers can get themselves into a bit of bother.

This comes about after a wonderful day in the display village looking at all the fantastic homes. So many shiny bathrooms, so many beautiful kitchens, master bedrooms, walkins – and did I mention the al-fresco with the fireplace, plasma and BBQ with fridge. The friendly display builder consultant will advise you of the $<insert>,000’s that you will get in benefits if you deposit and sign before the end of the month. ITS TEMPTING!

And many people enter into contracts with the builder…. before the land is complete.

It is important to recognise that unless the land is ready for the builder to start building within a certain time frame the builder will smack penalty payments onto the contract.

It is at this point the purchaser (you) come back to the friendly land sales person (us) to complain that it has taken so long to complete, the delays on completion and WHY IS THE DEVELOPER DELAYING!!

The fact of the matter is that the developer is doing everything they can to get registration – it is not in their interests to delay – as they only stay in business by selling property and getting your money.

It is important to understand their are a myriad of factors outside the developers control including local council’s for approvals, statutory authorities (Water, Gas, Electricity, and Telstra), State Government authorities (Office of State Revenue, Land Titles Office). Weather is also a factor.

Thus then it is important to recognise that many of the delays are out of the developers control.

The trick is not to enter into a contract with a builder until at the very least, kerb and guttering has gone in.

Don’t hesitate to email/contact me for more information

Cheers

Christopher Lowry

Posted in Land Buyer Tip, Uncategorized on 25th May, 2011 | No Comments »

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