Property development- Mitigate your legal risks

Every successful property developer will tell you that the real secret to successful property development, is managing the inherent risks.

Identifying and avoiding risk can be complicated, because of the many different types of development schemes and the varied challenges, each project presents.

Property development is speculative and always includes a measure of risk.

A property developer’s best friends are comprehensive due diligence, water tight contracts and appropriate insurance cover.

Here are some points to consider when embarking on a new development venture:

·     Consider carefully, the structure in which you will be doing business ie joint venture, unit trust, real estate investment trust

·     Foreign investors may require special approval and every investor will want an assurance of the likelihood of profit

·     Lenders will require security in the form of a mortgage

·     The transfer may be a direct transfer from one to entity to another, an acquisition of the shares/units held by the owner, a call option or a long=term lease

·     Each state/territory has separate legislation that covers title, general property matters, Crown lands, consumer protection, planning, land use and Native title

·      Local government and all other approvals must be obtained before you begin

·      Authorities can pursue the owner, occupier and mortgagee of the land if an industrial polluter is insolvent or cannot be foun

·      Construction sites must comply will all health and safety and licencing regulations

·      Owners will incur annual rates and taxes levied by state/territory and local authorities

·      Engage a good property lawyer to undertake a thorough document review at the earliest stages of the deal


·      It is vital to negotiate protective provisions such as indemnity clauses, methods of dispute resolution and appropriate insurance coverage.


Need a property or development loan?

Contact us @ propertyloans@realrenta.com  



Marlene Liontis
Friday, 25 October 2019

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