The loophole

So, if you do happen to be in the situation where you have:

a)  your land contract in your hands, and

b)  you, like us, just realised you have been fooled because you didn’t realise you needed a build contract signed too,

there is one loophole you might want to try before you give up and resort to consoling yourself with a litre of ice-cream.

Try for an extension on your exchange of contracts date.

You need to do this before you’ve exchanged contracts. To do this you will need to get your conveyancer/solicitor to write to the developer (using the contact details on the front page of your contract) asking for an extension on the exchange. You will need to provide reasons for your extension. Some reasons could be (obviously, they won’t apply to everyone):

• you’ve been unable to get a tender within the four weeks allocated and therefore do not have accurate information to provide to the bank for financing (it’s pretty common for a builder to take longer than four weeks to provide a tender). This is an especially good reason if you have selected one of the four preferred builders at Bunya and they haven’t been able to come through with the tender on time.
•  if you have a corner block there are no design panel pre-approved designs from any of the preferred four builders. This may mean you can’t get a tender for your build on time.
• if your land is unregistered you probably don’t have access to the block of land yet for any kind of independent assessments that may affect your final build price (this may include access for the builder to assess site contours, access for an independent bushfire report, access for independent soil testing… the list goes on!).

If I were you, I would ask for slightly more time than you need as you probably won’t get the amount of time you request. Be reasonable.

The benefit of gaining an extension for us has meant that we will be able to get a tender for the build price, therefore knowing if we can afford to pay for it all, before we’ve put down the 5% deposit on the land at exchange. 5% = a lot of money for us. It also means that settlement, in turn, will be delayed as the 60 days only starts from exchanging contracts. This means that we might just scrape in (if everything goes to plan) on having our build contract signed before settlement and we won’t need to pay interest to the developer for delaying settlement. Again, interest = a lot of money.

A caution: don’t get muddled up here and try to extend your settlement date after you’ve exchanged contracts because I doubt very much the developer will even consider it. You need to extend the exchange, not the settlement.

Hope that helps someone!

If you have any other good reasons for an extension and you’d like to share them please leave a reply.