Land and Property Subdivisions:

Property developers who wish to profit from currently existing land holdings may opt to subdivide their land and sell the separate lots where the combined sales prices of each lot would be greater than the market value of the larger, un-subdivided, parcel of land. Often, property developers believe that the development of the land requires the construction of some residential, commercial or industrial facility or complex to enhance the development project’s profitability. However, as noted by Aidan Devine:

“One of the misconceptions surrounding subdivision is that the development of land always requires the construction of a house on the land and that this creates the profit of the development. This is most often not the case. For many projects, the underlying value of a property development is most often the land not the building.  You can create a new allotment by undertaking a land division and then sell the allotment without having to build. This process is much less risky, more profitable and less time consuming.” [1]

A subdivision solicitor will be able to undertake the necessary due diligence on the property. This will require various inspections and investigations with government and local government authorities to ascertain what is affecting the land and how that land is being affected. This investigative process is important because it can establish the basis of the possibility (or indeed impossibility) of any future development of the land, and therefore its value. Some of the matters that will need to be noted are:

• Zoning issues – how the land can be used;
• Developments – what kind of developments require council consent, which are permissible without consent, and which are prohibited;
• The manner in which the land is affected by:
  • Pollution;
  • Bushfire plans and policies;
  • Flood plans and policies;
  • Proposed road widening plans; and 
  • Any other encumbrances.
• Easements and caveats on the land, right of ways, thoroughfares and rights of access which may affect the manner in which the land can be developed; and
• Connection to services and utilities such as:
  • Water access;
  • Gas access;
  • Electricity access; and
  • Sewerage outflow.
• The existence of any sewerage pipes or other wast drainage facilities running through the land preventing excavation or development; and
• The existence of a water tank or any similar subterranean structure which will prevent or prohibit construction and development on the land.

When the due diligence investigations are complete, the subdivision lawyer will report to his client (i.e. the property developer) and advise him of the outcomes of all searches. When the developer decides to continue with the planned development project, the subdivision legal advice will likely contain a recommendation that a team of relevant professionals be retained for the next phase of the project. These will ordinarily be professionals who will be retained independently by the property developer in relation to:

1. Surveyor;
2. Engineer;
3. Urban Planner (if necessary);
4. Building Designer (if necessary);
5. Architect (if necessary); and
6. Consultants.

Consultants may be necessary depending on the type of development proposed, or depending on what kind of land is being subdivided. A consultant may be able to provide important technical advice in relation to the subdivision. For more complex projects, a project developer may wish to retain the services of a consultant in the land and environment industry for his assistance. Conveyancing services and property law legal advice can be provided by the Navado Conveyancing and Property Law teams. This team will be best placed to provide legal advice in relation to the contracts under which the above processionals are retained.

Many of these professionals will be bound by industry professional standards. They will be expected to discharge their duties in accordance with these standards. In the event that any damage or loss eventuates as a result of the business developer relying on their advice or expertise, it may be open for the developer to sue in either negligence, professional negligence or breach of contract. Litigation against these professionals is not a simple affair. For more information, visitors are directed to our “Consumer Law & Negligence Law” title.

The Navado Environmental Law team works closely with the Property Law team by sharing legal knowledge and other resources. This allows for comprehensive legal advice to be offered to property developers. Once a team of professionals has been selected by the developer, Navado can co-ordinate the process by arranging for a preliminary meeting of all parties before any development application is lodged with the relevant council. A pre-lodgement meeting may also be arranged by the subdivision solicitor with a council representative (such as an urban planner) to discuss the particulars of the project. The council policies, guidelines and regulations will need to be closely inspected by the subdivision solicitor to ensure that all requirements are met and non-compliance issues do not arise.

Once all details are ironed out, the application can be made and tracked through the council. Law relating to subdivision of land may be complex to property developers who are not familiar with the legal principles involved. Failure to make due diligence and a lack of legal guidance through the process can result in costly disputes as well as loss and damage to the business and its reputation. It is strongly advised that legal advice be obtained by a developer before any steps are taken in the subdivision and development of the property. A property development law firm will be able to monitor the process of subdivision and development and provide the required assistance for the execution of the project.

If you wish to make an appointment, please contact us by telephone on (02) 9233 4048 or send an email to info@navado.com. 

[1] Aidan Devine, “Land Subdivision 101” Your Investment Property Magazine online (undated) <www.yourinvestmentpropertymag.com.au> (accessed, 20 December 2013).

This webpage (and any material or wording appearing on this webpage) is provided for general information purposes only and does not constitute any Legal Advice. It does not take into account your objectives, your instructions or all of the relevant facts and/or circumstances. Navado accepts no responsibility to any person who relies on the information provided on this website. We further refer you to our Disclaimer.