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Subdivision before construction

Discussion in 'Development' started by Blackmores, 17th Jan, 2016.

  1. Blackmores

    Blackmores Member

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    Hi guys, please bear with me as I am new at this. We have an old house that we are awaiting its planning permit for 3 townhouses in Melbourne. I've spoken to some land surveyors and they have been giving me different answers. Here are my questions:

    1) Because we are selling it off the plan, does that mean we need to get subdivision done after planning permit approval and before applying for building permits and construction?
    2) I heard for subdivision to be approved before construction, we will first need to demolish the house then provide services (drainage etc...) to the 3 lots before it will be approved. Is that true?
    3) If true, does that mean I will need to get a building permit for the demolishing first and supplying the services then get the main building permit for construction later on?
    4) So in essence, I will only be able to sell the townhouses AFTER subdivision is approved isn't it? Which could be after tearing the house down, providing services, subdivision approval.

    Thank you very much guys, any help will be highly appreciated.
     
  2. HD_ACE

    HD_ACE Game-Changer Premium Member

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    Are you selling vacant land or building and selling the townhouses? Quickest way is to do the subdivision process along side the build (built strata etc) so in essance once the build is complete with all services everything should be approved and you can apply for titles. Then you should recieve titles approx 4-8 weeks after completion if all requirements are signed off. Generally when you sell off the plan you put settlement as 2 weeks after recieving titles (for example).
     
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  3. Blackmores

    Blackmores Member

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    Thank you very much HD_ACE, really appreciate it. The intention is to sell off the plan and construct them. Do you mean we do not actually need the land to be already subdivided before we can go to an agent and get them to sell for us OTP? Thanks! That cleared up a lot.
     
  4. HD_ACE

    HD_ACE Game-Changer Premium Member

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    Correct but will need titles to settle.
     
  5. Blackmores

    Blackmores Member

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    Thank you very much HD. Can i ask you something else? I spoken to my conveyancer, she is insisting that I send the Plan of Subdivision to her so she can submit it to my mortgagee along with SA22 to get bank permission for the subdivision and that the POS should've already been done. But my project manager is saying differently, he is saying we can only get the plan of subdivision organized by the Land Surveyor AFTER the council approves the planning permit. I am very confused by them. Everyone's saying different things.

    Are you able to kindly advise who is right and who is wrong? Thanks HD.
     
    Last edited: 18th Jan, 2016
  6. HD_ACE

    HD_ACE Game-Changer Premium Member

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    From my understanding ( If this is in Vic) your surveyor should have a plan of subdivision that was put to council with the planning permit. Then Council will approve with conditions ie water, power etc. Then once these conditions have been completed, you apply to council (and authorities) to certify that plan of subdivision.

    So they question is does the bank require the certified plan or just the original plan?
    This is assuming your subdividing first and then building.
     
  7. albanga

    albanga Well-Known Member

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    I can answer any of your questions based on Victoria as I just did this very thing.
    Here is the required order:
    • Get approved council plans for the development
    • Get surveyor to do a plan of subdivison and lodge with council
    • As you are not developing the land yet council will make you enter into a section173 agreement which is a legal entry on title protecting the council which basically says you will develop the land as per the agreed planning permit. This must be approved by the mortagee (allow 20 business days, so slow!!!)
    • You will then need to meet all other criteria set out on the subdivison permit, this is basically sign off from all authorities. Allow 3 months for this, some are fast whilst others such as Jemena are very slow. Keep in mind with Jemena they will need to install a pit and if you are keeping the existing you will need to disconnect overhead and reconnect underground if it does not meet there guidelines (cannot cross common land, cannot be under X height).
    • Once all points have been satasfied your surveyor will submit to council who will then sign off and it can be lodged at titles office. Allow another 30-60 days for this. My new titles have still not been created and that was lodged mid December with no finish line in sight still.
    To answer your question though YES technically you could sell with just the planning permit in place and the sale is "subject to subdivison". Personally though I would not go near this route, I would ensure council have issued my subdivison permit before daring to sell. Councils are fickle beasts and to role the dice assuming your Subdivison permit is straightforward is a massive risk IMO. I would want to know what clauses they want met first.
     
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  8. albanga

    albanga Well-Known Member

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    Oh and Yes your bank is definitely going to want to see your plan of subdivision. They want to know what you plan on doing with there land.
     
  9. Blackmores

    Blackmores Member

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    Thank you very much HD. Maybe I will need to go speak to the bank again. Because based on my knowledge, we are on the verge of getting a NOD to grant a permit. Maybe the Plan of Subdivision will be the next up to be due once the NOD to grant permit is granted?
     
  10. Blackmores

    Blackmores Member

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    Thank you so much Albanga, that is incredibly detailed and certainly very useful as well. Can I ask if we are able to do the Plan of Subdivision alongside the building permit application? Or one must be after the other? Because once we get the Planning Permit approved, my builder will like to lodge the building permit right away. Do we need the Plan of Subdivision to be done before we start demolishing and building the property? I'm assuming we can't touch the property until we get the bank's permission am i right?

    Thanks guys.
     
  11. albanga

    albanga Well-Known Member

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    Unfortunately I am unsure about the answers to those questions but:
    I would think the mortgagee would want to know what you plan on doing with the land before you go and bulldoze the house. Best to ask that question in the finance section.

    Regarding the building permit then I would only assume this is totally fine. Most builders build prior to subdivision so obviously have a permit when they do this.
     
  12. Cactus

    Cactus Well-Known Member

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    It is possible to get a planning permit for two dwellings and then a planning permit to subdivide. I have done it this way on my current development as I was somewhat doubtful I would get the development up and wanted to reduce costs if a failure. I am putting two 3bed units on a 499m2 block and another two on a 501m2 block so was nervous.

    Sounds like your team have structured it this way.

    You can get the sub permit post building permit or even post completion if you want but best to get it as soon as possible.