Tender and contract clause with PD

Hi everyone,

We're going to do our tender and contract with PD on March but our land title will not be released until May.

I would like to know what clause or conditions should we add to ensure that we get refunded for the 5% deposit that we have to pay PD in case something goes wrong with the estate developer and they can't deliver on the land? Delays could also run for months so what clauses or conditions should we watch out for to make sure we get our money back.

Why not sign after everything is in place? This way they can get started soon after signing.

Because you might want to lock into a price and/or promotional package.

We were in the same boat, with a 4-month delay between tender and land settlement, and contracts signed about a month before. We never thought about the developer going bust, and luckily that didn't happen. As for the building contract, you will have some protection under consumer law...

The contract specifies that the house is to be constructed on that specific piece of land, so if the land sale falls through, construction obviously can't go ahead.

I haven't looked into it, but check around the Building Commission's website and see what you can find. The builder is probably entitled to keep a set percentage for work done to date on plans, etc. Give the info line a call if you can't find the answer online.

A lot of builders allow you to keep a signed off tender for 6 months in order to allow you to keep the promotional packages without the need to go to contract. In the case of my builder, you can do that and all you lose if something does happen is the initial $3k you pay in order to allow them to do soil tests, prepare the tender, do the architectural plans, etc.

It might take you a month or more to get through the tender stage anyway so you might as well delay finalising the tender for a couple of weeks. It generally takes them 2-3 weeks to prepare it and then you have to go backwards and forwards doing your additional items, then you have to do your colour and material selections, etc.

The only thing you can do is give yourself the ability to get out of the contract if something happens to the land.

It's unreasonable to expect PD to refund your 5%, it's not like they are just sitting on it. They incur costs relating to your contract which they can't get back and that's not their fault. You don't have to do a construction contract before the land is titled, that's a risk that YOU take.

Thanks for the responses.

I realize that there is a risk to signing the contract before the land title becomes available and I'm after clauses that would help us minimize the risk.