I would like to buy a block of land, but have discovered that I will need to apply for a material change of use through council in order to build on it. I want to make the contract subject to this being approved by council first, and also to a finance clause, but don’t want to scare off the vendor with too many clauses, as I really like the property and it is fairly unique.
I want to lock the vendor in so they can’t pull out or raise the price, while avoiding being stuck with an unusable block of land.
Will a normal contract do this? Once they have signed a contract (including clauses eg finance) what are their exit options? [blink] I presume people change their mind and try to get out of contracts. What happens then: can the purchaser sue?
ThanksDallas
dallasm
Making the Contract subject to a material change of use will probably require the Vendor to sign and authorise the application which may cause him further concerns. This will no provision for who is responsible for the costs of such application ete etc.
Then you have finance.
Why not make the contract merely “subject to and conditional upon the purchaser carrying out his due diligence on the property within a period of xyz days and being entirely satified with his findings.”
This may amalgamate a couple of clauses into one and make it more palatable for the vendor.
Once the Vendor has accepted your terms and signed the contract as long as you perform everything in your power to comply with your conditions and timeframe then the vendor cannot withdraw.
If he fails to settle you would have a “Specific Performance” claim against him.
On the other hand accept that if you drag the chain he may not agree to any time extensions.
Cheers Richard
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Richard Taylor | Australia's leading private lender
Dal, u can make the contract as air tight as you like depending on how it has been REPRESENTED to you, ie; excellent investment/possible development site.
Once a person/agent makes those promises you have a right to add clauses in to protect your interest.
If on the other hand it is a steal and you smell big bucks then you can take a punt but I would advise u spend some good dollars and seek a certifier to go to council for you and suss it out.
I am working on a deal (land – waterfront) using a similtaneous settlement clause with a 4mill profit and will know where i am going in the next 14 days.
Some times there is more money in onselling and cashing up rather that waiting 3 years going through the development cycle and praying the market will be kind in the future to make proffits, only god knows.
Resi
I think adding “contract subject to this being approved by council first” is fine, however you would need to add something such as that the contract will be signed x days after this is achieved or some such thing..as who knows how long it will take to get council approval, so how do you set a settlement date?
and also to add a finance clause; would probably be more worrying for the vendor than the above as it looks like you just want a way out if you change your mind..?
What would you think if the deal was offered to you?
REDWING
“Money is a currency, like electricity and it requires momentum to make it Effective”
Count The Currency With This Online Positive Cashflow CalculatorJust lump all of your concerns into a Due Diligence clause and walk away if it doesn’t come off.
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