I have one property sold, with conditions attached it is “subject to sub-div”. property is 6 acres. Purchaser gets 2 acres. Proposal will be for 2 more 2 acre blocks. Council has been approached with proposal by surveyor, who says its highly probable for approval. But as we all know, council approvals can be a lenghty process. So I have allowed min 12months for settlement, based on this.
My qu is:
If it is confirmed (contracts are signed & 20% deposit is down) that 2 acres is sold, yet there is still no approval for sub-div, is there anyway the bank (or any lender) will come to the party & accept there is now equity avail in the rest of the property?? (So that I can access it to start developing the other blocks) [confused2]
Or is there any “creative” ways anyone can suggest that without approvals, I can access more cash against the property to start developing??HappyHomes | HappyHomes
Email MeRegrefully because your Sale Contract has a big “SUBJECT TO” in it then the buyer can pull out if these conditions are not met.
As such any lender is going to adopt the same philosophy that it is not sold until the DA is apporved by the Council and therefore will only adopy a current valuation rather than after works figure.
Just on a spearate note you mention that a 20% deposit has been taken. Not sure about other States but in Qld anything above a 10% deposit makes the Contract an Instalment or Terms Contract and has significant legislative consequences. Check with your Solicitor that by taking a 20% deposit you have caused yourself more problems than it is worth.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
hi richard. Can you explain what you mean by:
anything above a 10% deposit makes the Contract an Instalment or Terms Contract….
How does taking a larger deposit turn it into a terms contract, & what is one?? [blink]
I elieve b/c it is a long settlement, where by new purchaser will be renting it until settlement that it may be a “terms contract” (??) anyway??[blink]HappyHomes | HappyHomes
Email MeHi As i say can only comment for Qld but i am sure that many States will be similar.
Where an amount of in excess of 10% deposit is taken or paid the contract can be considered a Terms contract. This has legal implications if settlement does not take place on the due date and ramifications for things such as penalty interest.
Check with your lawyer about the regulations in your State.
Richard Taylor
Residential & Commercial Finance Broker
**NODOC loans from 6.89%**
Licensed Financial Planner
http://www.yourstatefinance.com
[email protected]
Ph: 07-3720 1888Richard Taylor | Australia's leading private lender
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