Hi All
Finally making the leap to undertake in my first property development.
The property is in Vic and it involves building 2 units/townhouses behind an existing dwelling.
I intend to engage an architect who will be responsible for the e2e development, drafting, applying for plans/permits and the project management and delivery piece.
As I am very new to this, I would greatly appreciate if you guys can share your experiences in terms of clauses I need to ensure are included in the contract so that I am protected.
Without doubt that going into this project I will make some errors and thats just part of the learning process, however I’m keen to learn from others where possible and try avoid costly mistakes.
Any helps, guidance would be much appreciated.
Many thanks.
is this the contract to purchase land or to build?
Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
The contract is to ultimately build. The land is already purchased whereby I am receiving rent from the existing property.
Your contract is likely to be in two parts:
- The planning, design, documentation, project management and subdivision.
- The building contract.
There are both legal and practical reasons for this.
A building company may be able to offer an end to end service, however, there will be no competitive tension around pricing as the end product will not be determined until a town planning permit (TPP) is granted for the project. As it would be impractical to engage say three builders to each provide end to end services for an unknown quantity it would be prudent to seek building quotes when the TPP is at hand.
Looking at it the other way around, it is quite possible to seek several quotes for the planning, design, documentation, project management and subdivision of the project, and then several quotes for the built form.
Good architects and designers have in-house building and planning expertise and can help ensure the budget is reasonably accurate and that the process is clearly defined. Find yourself a practice that is able to manage the whole process with/for you and you will be well on the way.
Thanks for the response.
Do you have some advice, in terms of common mistakes your clients make during the development process?
My advice would be to investigate the options carefully, and measure those options without emotion.
I have seen people developing wrong product for a market.
Have you checked what would be the best product for a market? Planning rules may let you to develop 3x3bed townhouses, or 330m2 gross floor area (terminology varies from council to coulcil). However, same allowed floor area may be distributed among 4x2bed townhouses or units. Or , maybe, the best product for your market would be 4 bed house on a small battle-axe block?
real estate agents+knowledge of your market is a first step.
When it comes to planning permit, I think it would be better to engage a town planner and a building designer. Architects are very expensive and more often than not not fully familiar with a council's operations.They can design, but pushing your way trough the conuncil is not their main game. Find a town planner who has fast track accreditation, meaning that , if your proposal is fully compliant, you get your DA out of council (approved) in 2-3 months, instead of 6-12 months. As far as I know, all councils have that system in place. You can still use an architect over building designer, if you wish. Obtain a quites from both, and see how you go.
If you have some already built project that you like, jump on local council's website and look up DA documents-on the drawings you will see who has designed it. then go there.
You will need also hydraulic, structural and civil engineers, surveyor. Best to use ones recomended by your chosen designer. However, aslo ask for at least two names so you can compare their quotes.In building contract do not forget to state liquidated damages: penalties builder has to pay to you in case he is late with competion. It is usually based on anticipated loss of rent/week.
Do not use a builder who does not have experience with building a multi unit development. House builders can not anticipate costs for multi unit development, neither the time frame. It is first hand experience-we have made that mistake!
Good luck and anjoy the ride!
Ballerina, B.Arch.
What suburb are you developing in? I can give you some advice on the planning permit process.
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