Selling before approval?

[nsfx84]

Hi guys,

I am currently subdividing a block of land in Melbourne and putting 3 townhouses on it. Have spoken to the council and plans submitted and they are happy with the design and development. The next stage is putting up a board advertising the development to the neighbours. So it could still be 3-4 months (hopefully) before getting the permits to start building if things to go VCAT.

We have a family contact that is very keen on snapping up all three units for quite a good price as it is in a location that he wants. He was wondering if he could sign something to secure it early? Even before the plans are approved? I am happy to do that as well as selling all 3 will save so much hassle for me and happy to lock it in as well. Obviously, if plans are not approved for some reason at the end, the contract will be invalid.

So, my question is, is it legal? and if yes, how do we about doing it? Thanks guys.

 

[Big Will]

Yes you can, seek legal advice.

Have you considered approaching a REA and seeing if they want to sell it with P&P and make an arrangement that if your friend purchases they get $0 commission.

One thing you should think about is not getting business and family mixed up. You need to think of it as a business transaction not a favour for a mate.

This way you will know if you are getting a good deal or you might find a better deal. I would rather sell my land for $50,000 more to some random then to my father for $50,000 less.

If the difference between the two offers was $2,000 I would sell to my father but at least I know it is at FMV.

 

[Peterw]

Off The Plan selling has been going on for some time. Yes you should see legal advice, if you want to do either an "intention" letter of a Contract to ensure you are within State law.

 

[Terry_w]

So, my question is, is it legal? and if yes, how do we about doing it? Thanks guys.

Yes it is legal. This is just an off the plan contract. A condition of the contract will be granting of sub-division, if this does not happen either party would be able to terminate - this sort of thing. A property lawyer could draw up the contract for you.