I recently purchased land at Bonner and Wright, and I wanted to give a heads up to any buyers (in particular 1st home buyers) who are under the mistaken impression that the LDA is to be trusted with their standard contract terms.
The Bonner land contract (at least for stage 2) was very straight forward. No conditions that would warrant even a second glance.
But the Wright land contract? Wow!
Anyone who has purchased (or considering a purchase), should have a very good read of Clauses 38 and 39. They relate to getting approval from the seller (in addition to normal planning permissions through Actpla), and if you dont it’s going to cost you $8,000 in damages! Furthermore, all purchasers (regardless of whether you are Land Rent or Standard Lease) must pay LDA $8,000 on settlement as a “compliance bond”, which is then refundable upon getting their nod of approval- by which time they are allowed to earn interest on and keep all that interest.
Now, bear in mind that they cant unreasonably withhold this approval if you are approved to build through Actpla and satisfy their requirements. So basically, they cant refuse approval, but they can and will claim $8000 in damages if you dont get their stamp prior to building. Can someone please explain to me how this clause isnt predatory? Because I can see A LOT of people getting stung by this unfair requirement buried 3/4’s into the contract terms.
The sellers approval cant be withheld from you. It’s Actpla that decide if you meet planning requirements or not. But the seller can claim damages if you dont ask them if its ok to build first. How or why is this allowed in the ‘standard terms’ of LDA’s land releases. Unbelieveable! I mean, Forde had a “compliance bond” requirement (at $2500), but that’s expected because they are private developers. But the LDA to use predatory terms like this is completely unexpected.
I just want all buyers of land in the ACT to double check what they are signing, and dont assume that one land release directly released by LDA is the same as the next.