The trend for neighbours to join together to sell as a group to a developer is increasing. No longer do owners need to wait for a developer to drop a flyer or door knock to show their interest in buying the land as a site. Owners are savvier about the market and are taking control of the process. Land for development, especially in metropolitan cities in Australia, is becoming scarcer and so owners are banding together to sell as a group.

Not all sites are potential development sites as each council will have certain restrictions, and a developer will use these restrictions to negotiate commercial terms of the deal.

We negotiate with developers, owners and real estate agents to obtain the best offer for the group. We advise on any risks and mitigate those risks.

A very important document for owners to consider when selling as a group is a Collective Agreement (also known as a Joint Sales Agreement or Group Sales Agreement). This document sets out the rules that the group must adhere to and mechanisms to ensure the group remains intact from the beginning to the end of the deal. For large groups, a committee may need to be formed to make administrative decisions and the Collective Agreement sets out the rules for appointing a committee and decisions that can be made by the committee.

Other important terms in a Collective Agreement is how the sales proceeds will be allocated to each owner, i.e. by land size or equally between the owners. These issues need to be discussed and agreed upon at the very beginning of the journey. Without the right foundation, the group will experience cracks which could lead to losing the deal.

This journey for vendors is very different from a “standard” sale and our job is to make it a safe and secure, pleasant and rewarding journey for our vendors. Our team of property lawyers are willing to attend an initial meeting of the group, whether it is residential, commercial or strata to discuss this process further.

Talk to one of our expert lawyers today.