Buying development land in QLD: Letter of offer vs going to contract

I have a question for developers out there with experience in QLD. I have viewed a typical letter of offer used in Victoria for buying development land. I was told by a lawyer in QLD that the letter of offer that I viewed would not be valid in QLD.

The letter of offer used in VIC had among other things (following clauses are paraphrased):

• A clause stating that the Seller agrees to sell to an entity yet to be proposed by the Buyer (the point being that the buyer gets advice on appropriate purchasing entity while conducting due diligence)
• A clause stating that the offer is subject to due diligence of X days (e.g. 21 days) and another clause that the Seller must agree to access to the property to on a 24 hour notice for the purpose of obtaining planning permit.

A lawyer in Brisbane advised me that the first clause listed above would not work in QLD as it would attract additional stamp duty.

He said that in Brisbane it is typical to go straight to contract using a standard contract but then having a large number of conditions that allow for due diligence.

Does anyone here care to share their experience in buying land in QLD. Do you use a letter of offer to cover the due diligence period or do you go straight to contract and have due diligence clauses in the contract?

 

letters of offer won't be acceptable in any state - well wouldn't be binding.

Setting up entities after exchange could be treated as a subsale and also have asset protection consequences. Why not get the advice on structure before looking for property and the right entity could then enter the contract.

heard about option agreements?

 

Hi Terry, I am getting advice on the appropriate structure (or at least trying to - it is amazing the number of vendors of advice who don't get back to you when you offer for an hour of paid consultation on these subjects - if people are so busy why don't they just raise their rates?)

I will have the entities set up before bidding on land.

As for option agreements, I will consider them if the vendor is relatively sophisticated with respect to property. I suspect typical Mum and Dad sellers of land might shy away from an option agreement.

But I am after practical experience from developers here as well.