Forming a neighbourly coalition: 3 steps to take before selling a 'megalot'
Published 04 May 2017
In this day and age, land in cities and suburbs is worth its weight in gold. A popular new trend is emerging in the property market where neighbours band together to sell their collective properties (known as 'megalots' or 'super lots') to developers, ultimately making a much larger profit per capita than they would by selling individually. If you're considering advertising your property to a developer, take a look at these three suggestions, and make sure to chat with an experienced Parramatta conveyancing lawyer before proceeding.
1) Do your research
Before you begin discussing options with a developer, it is important that you and your neighbours talk to local council representatives to determine whether or not the area has the potential for redevelopment. If a developer has already approached you (meaning the zoning laws are compatible with their envisioned project), do some digging on the development company to make sure they have a good track record before entering into an agreement.
2) Maintain communication with your neighbours
Unfortunately, in some situations, not every homeowner in the group is in agreement about the price or terms of sale. This is an essential issue to figure out at the beginning of the process, as you and your neighbours will need to present a united front to any potential development companies. Bringing in a property lawyer who knows the business, can mediate discussions and represent your group to a developer is one of the easiest ways to iron out these problems.
3) Make sure you get a fair price
One of the factors developers count on when buying property is that the homeowners will not know the true value of their land. Even if you think the price you're asking is astronomically high, there's a chance your property could be worth more. The best way to determine the true worth (and get the most from the development company) is to work closely with your representative while also keeping an eye out for changes in the market.
As cities and suburbs continue to expand outwards and upwards, rezoned residential property is becoming more and more valuable to developers. They aren't the only party that benefits from this type of deal, either - not only do the previous landowners receive a hefty payout from the sale, but hundreds more people will be able to live (or work) on land previously occupied by only a handful of tenants.
If you and your neighbours are thinking about joining together to sell a megalot, consider reaching out to a Parramatta property lawyer today.
Please call us on 02 8833 2000 to speak with a lawyer
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