Buying Land

What happens if I can’t afford to buy my land when it registers?

This is an extremely common question that we are asked when we have clients purchasing unregistered land.

The short answer is that regardless of the change in your circumstances, you are still locked into a contract that is required to be completed.

It is therefore extremely important that when you purchase unregistered land you should be aware of all of the changes in circumstances that may occur while you are waiting for your land to register, such as:

  • Loss of job
  • Death of a party to the contract
  • Separation
  • The block of land losing value (worth less than what you are paying)

Unfortunately, none of these circumstances allow you to get out of the contract. You are still legally bound to complete your purchase.

What are the consequences if I then do not complete my purchase?

The consequences are quite severe and include:

  • You will be issued with a legal notice by the developer/vendor giving you a specific time in which you need to complete (settle) called a Notice to Complete.
  • If you then still do not settle, the developer/vendor can terminate the contract and claim the deposit that you paid when you first purchased the land.
  • On top of the loss of your deposit, the developer/vendor can commence legal action to recover any further losses they suffer.

From this you can see how important it is to be sure of your decision and circumstances when you are considering purchasing unregistered land.

Purchasing unregistered land

So I asked my client, I said, “What did you discover having already bought unregistered land that you didn’t expect?” The response I received, which inspired me to write this blog was “they lie about registration”. This blogs not about how developers lie, but it is about what you as a purchaser of unregistered land need to consider even after you’re told the anticipated registration date. You need to be aware as a purchaser of unregistered land that while you are provided with an anticipated date for registration, this date is approximate only and subject to change. There are two things to consider, the process involved in registering land and the provisions in the Contract for Sale.The developer doesn’t have control over registration of the land because there are processes that need to be followed and third parties that are involved in these processes. Before land is ‘registered’ construction works need to be completed, council must approve the plan of subdivision and the plan of subdivision must be lodged to the Land and Property Information. In this process there are several parties involved, it is because of this that registering the plan of subdivision can take time. It is also because of this that exact time frames of when the land will register cannot be given.

Generally speaking in a Contract for Sale of unregistered land, there is a provision for what’s called a ‘sunset date’. This is the latest date that the developer has to have the land registered by. It’s your worst-case scenario. This date is important to consider because as a worst-case scenario you could be waiting until then. It’s only until this date is exceeded that you have any options. In most cases, if the sunset date is exceeded, you have the option to elect to no longer proceed with the purchase.

So it’s risky business purchasing unregistered land but that doesn’t mean you shouldn’t, now though, you are more prepared and can enter these sorts of transactions with a better understanding.