The rules for property developers have recently changed. It is now simpler to work as a property developer.
Property developers do not require a licence.
If you held a licence under the old system, it has now expired. You may now operate without it. If you were a property developer salesperson, you are now registered as a real estate salesperson.
If you have at least a 15% interest in the property you must disclose to a buyer if you pay any benefits to a third party. This includes fees, commissions or other benefits (money or otherwise).
You will need to tell the buyer:
- the full name of the third party
- their relationship with you
- the benefit they will get from you.
Third party agencies might be:
- mortgage brokers
- building or pest inspectors
- marketing agencies
- real estate agents.
If you sell house and land packages, this will apply to:
- the building contract
- the land sale contract.
Payment from buyers
You must make sure that a sale payment from a buyer goes directly into a trust account. This includes part-payments and deposits. As a property developer, you will not have a personal trust account.
You will need to store these payments in a trust account managed by:
- the public trustee
- a law practice
- a property agent.
Extra rules apply to larger-scale subdivisions (subdividing land into 6 or more parcels).
These rules cover:
- buying and selling off the plan
- disclosing information to potential buyers
- terminating a contract
- handling trust monies.
These rules apply to:
- a building contract
- a house-and-land package contract
- a land sale contract.
Similar rules apply if you’re developing a community titled complex (such as a block of units).