Just seeking a bit of advice from people who may have experienced this - regarding land prices, delays in settlement.
History:
In 2017 / 18, when prices were going crazy with new land, increasing every month - we decided to pitch in and try and get a land for first home buyer
Got a land from a developer in wollert, melbourne in 30 July 2018 (note that our sunset clause is July 2021 - will relate to this later )- size 400 sqm, at the time it was slightly more expensive than the surrounding area (about 20k-30k more), as the estate was being represented as premium - we liked the location and were happy to go with it - expected entitlement Q4 2019
we also got a house builder and signed a contract in Feb 2019
Problem:
The entitlement didn't happen in Q4 2019, we were told it was most likely going to be Jun 2020
In March 2020 - it was officially confirmed that the entitlement will now happen in March 2021
The real estate developer sent us an email in April that they now have started construction work and plan to finish that off by Feb 2021 with subdivision registration happening in March 2021
In May, we got notification from land developer to increase the sunset clause by a year (originally ours was July 2021) as their lender terms had changed and their lender wanted for some of the contracts (early buyers into the estate I suppose) to extend the sunset clause - and for this inconvenience they are offering a 250 AUD debit card
What does this all mean for us ?
well -
1- because we had signed the building contract earlier, they can only hold the price for a year - after that they are charging 1200 a quarter for delays, a years worth of delay means about 4800 AUD
2- the land price , which we paid a premium for - have fallen and might continue to fall further because of covid19 - the same estate (based on data from realestate disclosure data) is selling the same sized lots in the same stage for 30k less
3- this means that the bank valuation for the land will also screw us up - outside this state the difference is even more huge - 50-70k difference from other estates
4- also take into consideration the rent that we will continue paying for these additional delays
Now I have talked to to the solicitor
what if I don't agree to sign the sunset extension and try to get out of the contract ?
the solicitor told me the sale contract, in the sunset clause they only mentions about plan registration, not entitlement - so theoretically, they may register the plan and I'd still be bound - they could potentially keep delaying entitlement further
I have been trying to get hold of the land developer manager since last 2 days to ask him what my options are - can I swap what I have with a bigger lot size ? (they have one for sale at 448 sqm, for about the price I paid back in 2018 for 400 sqm), what are the implications if I don't agree to sign ?
My Concerns and Advice ?
1- first concern is land valuation - it might continue to go down, and as of now, it's still overpriced than the market
2- what can be done in this case ? if we're not able to secure the loan for this ?
3- Is it possible to swap one lot with another ? has anyone been able to do this ? (in this case for me, it would mean that I cut my losses a little bit on price valuation)
UPDATE 1:
Sorry about that I mentioned earlier our sunset clause expires in July 2020, that was a typo, it's actually July 2021 - which may have caused some confusion in the comments
I had a chat with the estate manager - there might be a small possibility to be able to change the land lot to a bigger size, but apart from that he mentioned to go through their legal team on all these questions including the process to change the lot
so just emailed my solicitor with that
What makes you think the solicitor is not giving you the correct advice/range of options?