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Purchaser wants to build on our section prior to settlement

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  • Purchaser wants to build on our section prior to settlement

    Hi there.

    We have had an offer from someone on our section. They want a long (6 month) settlement which is fine, but also want to build on the section before settlement?

    This doesn't feel right to me at all?

    1- what if they don't end up settling and we are left with a half finished building?

    2 - it's seems suspicious they can afford to build yet not afford to settle for 6 months

    3 - what if the incur extra costs to us during the build? Damage to our or neighboring properties, or breach any consent kind of things?

    I guess I'm wanting to know, before I bother my lawyer... is this ACTUALLY something that happens, how are risks mitigated, and are there really any benefits for us except for it possibly meaning we get a sale?


  • #2
    what they are hoping to do is complete the build and sell the property at settlement or soon after, even before to fund the section purchase. (and reduce servicing loan costs. It is effectively builders terms? It is common with builders and a developers way to get subdivisions filled up but it certainly needs legal advice.


    • #3
      Very common and pretty standard with developers. Worst case is you get to keep your deposit and you may get some (unwanted) improvements on the property. Not risky or weird. Talk to your lawyer.