The questions you need to consider are the following.
Are the commercial parameters clearly
understood by both parties? These are the nature of the option
(whether it is a call option only or a put and call option), fees
to be paid, extensions to which the developer is entitled, the
price (and any formula for uplift depending on the outcome of
development application) and other matters.
What rights may the developer be looking for
during the option period? These can include access, right to
market, right to lodge applications and right to carry out
What concerns do the vendors have,
particularly with the identity of the developer and any change in
What are your fees, on both the option and the
contract? Who pays them and when?
Are the vendors seeking any additional
benefits? This will include the right to remove items from
the property, being freed from the obligation to clean the property
up before settlement (effectively to give "vacant
possession"), the right to the benefit of any development
applications and accompanying reports if the option does not
proceed, and perhaps the right to buy one of the properties
resulting from the redevelopment of the site at a discount.
Are there any particular issues with respect to the site which
need special consideration and discussion? For
example, if the property is a working farm or if there are tenants
on the property, then these issues need to be discussed and thought
through and an appropriate commercial resolution reached.
How does GST affect the option and the
contract? This needs to be discussed.
Be aware of the interests of all parties to help them reach a
Being aware of these matters and keeping them in the forefront
of your mind when negotiating with the parties will help them reach
a commercial agreement more quickly.
It will also show that you have considered the interests of all
parties (thereby giving them greater comfort in proceeding) and,
ultimately, will lead to a more timely entering into of documents
by the parties, as all of the relevant commercial matters affecting
their respective positions will have been considered and discussed
before proceeding to documentation.
The Council announced planning policies to encourage more inner suburban retirement village and aged care development.
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