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  • Writer's pictureSam Kuhn

Due Diligence Essential in Real Estate Purchases

At the time of purchasing property consideration should be given to what the intended use of the property will be as town planning schemes govern what is an acceptable use of property within certain areas. A due diligence clause should be included in the contract so there is an opportunity to investigate whether the current use of the property is lawful and if the proposed development will be considered accepted development, assessable development or prohibited development under the Planning Act.

Accepted development is development for which a development approval is not required, whereas, assessable development requires a development approval and will be either code or impact assessable.

If a due diligence clause has been included in the contract then investigations should be undertaken to ascertain whether the property is suitable for the intended use. Undertaking these enquiries will assist with having a greater understanding if the intended development or use will be consistent with the town planning scheme.

When undertaking due diligence enquiries certain factors should be considered such as:

  1. the current use of the property. This will have an impact on whether the current use is lawful and if the intended use will be considered development and be subject to the development approval process;

  2. if any development approvals/conditions attach to land. This may affect the future use or development of the Property. It may also reveal any compliance issues or outstanding items that have not been finalised which may incur additional expenses or affect plans for its intended use;

  3. the relevant zone that applies to the property (eg residential, rural, industrial). Each zone provides for different assessment criteria and outcomes when obtaining a development approval;

  4. the boundaries and size of the property. This is important as there are minimum requirements for land size for developments depending on what zone the property is located in. Any encroachments or registered easements may affect any plans for its intended use.

We encourage anyone who is unsure of what their obligations are under the Planning Act or requires assistance with undertaking due diligence enquiries to contact the Property Team at Creevey Russell Lawyers Team on 07 4617 8777 to obtain further advice tailored to your individual circumstances.


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