Log in or register
Share on LinkedInShare on LinkedIn

ARTICLE · 09 APRIL 2017

The pitfalls and risks of pre-sales in property development

BRI Ferrier
Explore more from BRI Ferrier

Developers need to understand that lenders, concerned with prudent lending standards, focus on the quality of pre-sales.

AustraliaReal Estate and Construction
Costa Nicodemou (Formerly With BRI Ferrier)
Costa Nicodemou (Formerly With BRI Ferrier)
Brett Lennane (Formerly With BRI Ferrier)
Brett Lennane (Formerly With BRI Ferrier)
Author LinkedIn connections

To some developers, all pre-sales are equal. Yet, developers need to understand that lenders, concerned with maintaining prudent lending standards, focus on the quality of pre-sales.

At BRI Ferrier, we encourage lenders to follow some key principles to mitigate potential risks before allowing loan funds to be drawn:

  • Do not be complacent.
  • Check and follow internal policies.
  • Be sceptical, particularly where no agent is involved (misrepresentation can be a key issue).
  • Review the pre-sale information that developers provide.
  • Try to identify all buyers.
  • Refer all contracts to a lawyer for sign-off.
  • Manage diligently on an ongoing basis.

Pre-sales aren't always what they're cracked up to be

We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.

Register for freeORLog in

View source

Related Articles

Legal Intelligence Newsletters: sign up for the latest legal and regulatory news on your chosen topics

Read more about

Related Comparative Guides

See more popular content from

Article

Personal Guarantees In Commercial Leases: Risks For Directors

Directors who sign retail leases on behalf of company tenants often provide personal guarantees without fully understanding the scope of their liability. This liability can extend far beyond unpaid rent to include outgoings, interest, make-good costs, and enforcement expenses, persisting even after resignation or business sale. Understanding the distinction between guarantees and indemnities, and knowing when statutory protections may apply, is essential for directors seeking to limit their personal exposur
AustraliaReal Estate and Construction
Stonegate Legal
Stonegate Legal
Article

Project Distress In Queensland: Lessons From The Bathla Collapse

The collapse of the Bathla Group has sent ripples through Australia's construction sector, raising critical questions about financial distress management in major projects. With Queensland delivering an unprecedented infrastructure pipeline amid margin pressures and market uncertainty, are project participants adequately prepared to identify and respond to insolvency warning signs before external administrators arrive?
AustraliaReal Estate and Construction
Holding Redlich
Holding Redlich
Article

Construction Law in Queensland: Complete Guide

Construction law in Queensland establishes a comprehensive framework governing building contracts, payment rights, dispute resolution, and remedies. The legislation creates rapid adjudication mechanisms and strict compliance requirements that can determine the outcome of disputes within days. Understanding how statutory rules interact with contractual terms is essential for protecting rights and avoiding costly procedural mistakes.
AustraliaReal Estate and Construction
Stonegate Legal
Stonegate Legal
Article

Security Of Payment Still Bites: ACL Claims Won’t Stop Enforcement Of Adjudication Determinations

The Victorian Court of Appeal has reinforced that security of payment legislation creates a separate interim right to payment, confirming parties cannot use Australian Consumer Law claims to prevent enforcement of adjudication determinations. This decision examines whether allegations of misleading conduct regarding project costs and timelines can circumvent the 'pay now, argue later' regime established under Victoria's Building and Construction Industry Security of Payment Act.
AustraliaReal Estate and Construction
Holding Redlich
Holding Redlich
Article

Key NSW Security Of Payment Decisions: Monthly Roundup For August 2026

This monthly roundup examines five significant NSW Supreme Court and Court of Appeal decisions from August 2026 that clarify critical aspects of the Building and Construction Industry Security of Payment Act 1999, including payment claim validity, procedural fairness in adjudications, and enforcement of judgment debts. The cases address contentious issues such as the 12-month limitation period for payment claims, the relevance of unpaid judgment debts in security for costs applications, and the scope of sec
AustraliaReal Estate and Construction
Holding Redlich
Holding Redlich