Purchasing a property is a significant investment and an exciting milestone in one’s life. As a new homeowner, you’re understandably eager to know the precise date when you can move into your dream home. So, ‘what date will settlement be?’
In this article, Lacey Group’s Managing Director, Adam Lacey unpacks some of the challenges a Developer faces in providing settlement guidance and reaching project settlement.
“As a Property Developer, providing an exact settlement date can be a challenging task due to various reasons beyond our control,” Mr Lacey said.
External Construction Activities
Quite often Developers are conditioned to undertake external works on behalf of a statuary authority (i.e. ENERGEX, Telstra, etc) as part of their Development Approval. These external works often involve engaging specialist third-party contractors that are duly authorised by the relevant authority to undertake works. Depending on the type and scope of work required, these specialist third-party contractors are not always readily available and/or have significant and unreliable lead times which, subsequently, may impact project timeframes.
To complete the building construction portion of any project, the project Developer will appoint a Principal Contractor. Typically, in Queensland, for larger building projects the Principal Contractor is engaged via a ‘fixed price’ contract, that will include, amongst a raft of other things, an original construction programme. This construction programme is highly complex and technical in nature and will rely heavily on the performance of an army of specialised subcontractors and suppliers. This army is often impacted by market forces such as supply chain challenges, labour supply shortages and industrial relations activities. These forces are often hard to predict by even the most experienced of builders and, subsequently, typically result in construction delays and longer construction programmes.
The other major issue that affects the Principal Contractor’s construction programme is inclement weather. In Queensland, the most common forms of inclement weather conditions are heavy rainfall, extreme temperatures and high winds. And depending on the stage of construction and works in progress onsite, each of these events individually or combined will usually result in an unsafe worksite requiring works to be either being halted or abandoned. These works will not be permitted to re-commence until the inclement weather has subsided and the worksite is deemed safe. These inclement weather interruptions are often hard to predict and usually result in construction programme delays.
Project End Processes
Once the Principal Contractor completes building construction which is often referred to as reaching Practical Completion, there are a number of steps that the Developer must then undertake in order to meet their compliance requirements under the Development Approval and allow for project settlement to commence. These next major compliance steps are commonly known as Plan Sealing and Title Registration. Both of these steps rely on dealing with various planning authorities (namely Local Council and the Department of Natural Resources) which often don’t have reliable assessment timeframes and therefore can result in further delays.
All of these issues present an ongoing challenge for the Developer in providing settlement guidance and that’s why, “[at Lacey Group], we work closely with all parties involved at every stage of project delivery and ensure we’re in regular communication with our buyers to provide the most up-to-date information available” Mr Lacey said.
For more advice on project settlement, read our previous blog – Project Settlement… Where Do I Start? or contact us today.
*The information provided in this document has been prepared as a guide and does not constitute advice. Every effort has been made to ensure the information is complete and accurate. The information has been provided in good faith and with due care. The developer and seller of this project makes no representation (expressed or implied) as to the accuracy, adequacy or reliability of any statements, data, images or information contained within. Lacey Group Pty Ltd reserves the right to make changes to the contents of this document at any time. Whilst all endeavours have been made to ensure the content of this document is correct at the time of publishing, the information it contains is to be used as a guide and for information purposes only.