Hi Everyone,
I am an Adelaide property developer who is looking to sell house and land packages to individual people. I have spent a fair bit of time looking into a new issue that has cropped up recently but has been simmering for 12-18 months apparantly. It seems banks bascially wont give finance for a house and land package off the plan which has anything common like common land, community title, services, party wall, rooflines, gutters,group of 4 or more, slab etc.
What I have on offer is a group of three which are totally seperate to each other except for a party wall. All three have:
Torrens title
separate slab
separate roofline
separate gutters
separate storm water
separate water and sewer
seperate land componentso the purchasers of my product are needing finace for a block to start and then for the construction (the block has party wall rights on it)
Does anyone know if there are any lenders out there at all that will still lend to someone for something like this?
any comments would be greatly appreciated
Thanks in advance
Anthony
Yes there are but different lenders have different policies around this.
I would need a little more information;
1. Have you drafted the community scheme?
2. Does the development contain resort style facilities?
3. When you say “it has party wall” do you mean that the contract states that your company needs to be the builder for the land?I think you may be having issues with the last point. Most banks don’t like this part of it.
Again need a lot more information.
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This reply was modified 10 years, 7 months ago by
TheFinanceShop.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Torrens title with a party wall?
Are these joined garages?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
yes joined by garage and they are torrens title
There is no community scheme as the each of the three blocks are torrens title and all face the existing street
not sure what you mean by resort style facilities? Im assuming you mean a pool or gym which they dont have. they are 3 blocks next to each other with party wall rights. nothing at all is common with the houses, just a party wall between them.
Im not the one building them. they are being built by fairmont homes which is a large spec home builder in SA. the contract for the land does not mention that Fairmont has to be the builder.
I can send you a site plan if that would assist your assessment
Anthony
Hi Anthony,
In that case I cannot see anything stopping the buyers from ascertaining finance but I’m sure the devils in the detail. Talk to a banker or broker and give them all the documentation to assess.
From a high level I cannot see any glaring issues.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
The issue is related to split contracts and the Australian Property Institutes view that there is a $0 value to land with common walls/construction until it is completed, as it could not be sold into the open market. This would be the stumbling block which the purchaser would be facing.
As such these forms of developments are being sold on as OTP.
http://www.rk.com.au/insights/funding-issues-with-split-contracts-in-residential-developments/
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This reply was modified 10 years, 7 months ago by Corey Batt.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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This reply was modified 10 years, 7 months ago by
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