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  • Avatar of vinaysalian17vinaysalian17
    Member
    @vinaysalian17
    Post count: 12

    Hi,

    I need some help with properties sold in auction saying development opportunity STCA.
    Myself and a friend are planning to buy a big house in outer northern suburb and the build 2 or 3 town houses.

    If i buy the property in an Auction and later on if council does not permit to build..I am in a fix.
    How does it work?
    Is there a workaround..Can I put a clause during auction or before I make an offer?
    How long does it take to get council approval?

    Avatar of JacMJacM
    Participant
    @JacM
    Post count: 2,286

    The first thing you should do is call the local water authority and find out if there are any easements or sewer mains on the property.  If there are, ask them to explain what portion of the land you are not allowed to build on.

    Then ring council planning department and ask them if they currently see any reason why subdivision would not be allowed.  Also ask if there is any reason why you couldn't build 2 or 3 townhouses.

    Not convinced you can buy a property at auction  "subject to subdivision/building permission".  You could try that for a private sale, but the vendor would probably say no because it takes a while to get the permission.

    JacM | Jacqui Middleton
    http://www.tayloredfinancialsolutions.com.au
    Email Me | Phone Me

    Taylored Financial Solutions

    Avatar of Matt007Matt007
    Member
    @Matt007
    Post count: 259

    You're correct if you committed to the property and then Council came back and said no. The way to do it would be to have settlement subject to council approval, as per their advertisement, or reduce the price to remove the 'value add' of the 'potential development possibilities' etc. You could put down a refundable deposit initially with settlement conditions STCA and DA etc.

    If they're trying to sell the property with that potential for DA etc, then they'll have to wear the fact that a developer is going to want to know he or she can do what they want with it before financially committing to it. You'd probably find banks wouldn't fund on that kind of val without that council approval either, or at very least it'd be a question they'll ask..

    As JacM said, prior to auction, do your research, ask Council to look at it adn see if there are objections etc. If not, then by all means see what you can negotiate for settlement terms. Its no guarantee as Councils change their minds like we change PMs.. but at least its an indication. Nothing is guaranteed till you got that piece of paper in your hand.

    As for time frames, depends on the council and area, whether its one of thos risksmart applications that take 90 days or another regional council that takes 8 months. Another question to ask when you go through town planning.

    Good luck with it.

    Matt.

    Avatar of vinaysalian17vinaysalian17
    Member
    @vinaysalian17
    Post count: 12

    Thanks JacM and Matt. Thats really helpful.
    BTW Matt – Whats DA?

    Thanks again

    Avatar of Matt007Matt007
    Member
    @Matt007
    Post count: 259

    DA = Development Approval
    BA = Building Approval
    MCU = Material Change of Use
    RCL (?) = Reconfiguration of Lot/subdivision

    Avatar of JacMJacM
    Participant
    @JacM
    Post count: 2,286

    Here is anoher useful term :

    PRE-DA.  You can get it faster than a DA, and it gives you a good idea as to whether you'd get the DA.  So you might be able to buy "subject to Pre-DA"

    JacM | Jacqui Middleton
    http://www.tayloredfinancialsolutions.com.au
    Email Me | Phone Me

    Taylored Financial Solutions

    Avatar of Scott No MatesScott No Mates
    Participant
    @Scott-No-Mates
    Post count: 3,788

    Any development site is sold STCA but it is not a restriction on the sale it is a restriction on the development ie your risk eg if it is zoned for two dwellings and you propose to put 6 on the block the DA will not fly – this is not the vendor's risk and a vendor would not be subject to you achieving DA for an auction sale only in the case of you having negotiated an option or off-market sale.

    It is up to you to do your due diligence with council to determine what can be built on the site (the zoning certificate will give you notice of the development plans and restrictions which apply to the block).

    Avatar of vinaysalian17vinaysalian17
    Member
    @vinaysalian17
    Post count: 12

    Well said Scott. Thanks

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