Subdivision


If you are subdividing land into multiple lots, we can assist in obtaining separate Certificates of Title to each lot.


Once you have obtained consent from your municipal authority for your subdivision with the assistance of your land surveyor, you need to formally apply for a subdivision at Land Victoria with the assistance of a lawyer. This will result in separate titles being issued for your lots.


Let Prompt Legal Services assist with this convoluted process. We can liaise with your surveyor and prepare and lodge the necessary applications.


Also, we can obtain the necessary Bank consent if there is an existing mortgage.

To kick off the process, simply give our details to your land surveyor who will add our firm to the electronic processing system. We will then be automatically added to the process.

Lets talk about sub-division in more detail...

Choosing the right block

Choosing an appropriate block of land for subdivision is an important step towards a successful sub-division project. Any contracts for a purchase could be made subject to a due diligence period. This period may include working with a town planner, Land surveyor, Lawyer, Builder and Civil Engineer to determine if the project is feasible with relation to cost (see below), timeframe and general ability to subdivide.

Note that the size of the land is also important here. Though not a fixed rule, a general principle is that a sub-divided block should be greater than 300m2 per lot. Therefore, as a minimum, a block with sub-division potential should be at least 600m2. The current zoning of the land is also a determinative factor here (ie Neighbourhood Residential Zone (NRZ), General Residential Zone (GRZ), etc). Also, your lawyer can help you determine if there is currently a restrictive covenant explicitly preventing you from sub-dividing a particular block. If this is the case, sub-division is usually impossible.

Planning Permit

Remember, a planning permit with the municipal authority is usually required first and is usually initiated though your Land surveyor. This is unless the subdivision is exempt from requiring one. The planning permit will set the general parameters and conditions for final approval of the subdivision. Amongst other things, a Planning permit ensures that State and Local Planning Scheme Zone and specific overlays (such as heritage overlay) requirements are adhered to. Also, Neighbourhood Character policies are addressed here.

This is usually where a building envelope is determined. A building envelope is the actual area within your title boundaries that a building can be placed. Items affecting your building envelope may include easements on the land, minimum private open space requirements, trees, etc.

Building permit

It is important to remember that the planning permit is a separate process to a building permit. If buildings are to be built, this permit process is additional and raises the project to a new level of complexity. A sub-division project does not necessarily always include a building component. That is, the intention of the sub-division project may be to simply sell off sub-divided vacant lots.

Submit to council

Along with the planning permit, and with the assistance of your land surveyor, you will submit plans to council for certification. Certification also ensures all other relevant bodies have also signed off. The final step at the council is obtaining a statement of compliance which will be required in the next steps

Land titles office

The final piece of the sub-division puzzle is approaching your lawyer to submit plans to the Victorian land registry in order to obtain separate physical titles. They may also include such tasks as obtaining a section 173 agreement over the land (usually determined by the planning permit) of any covenants that are required. Call us to discuss this further.

What is a 173 agreement?

A 173 agreement is an agreement with the council to adhere to permit conditions at a later stage. Prompt Legal Services are able to organise for the preparation of these agreements. Call us to discuss this further.

Spear

As a sub-division project manager in Victoria, you will hear the term SPEAR thrown around a lot. SPEAR is an acronym for Surveying and Planning through Electronic Applications and Referrals. In short, the sub-division process has gone electronic and SPEAR is its central system in Victoria.

Determine Costs

With a sub-division there are entry, holding, construction and exit costs. In managing a sub-division project, you should be well aware of these costs at all times. There are many unexpected costs that inexperienced project managers will not include into their initial budget which will severely affect the end result of the project.

Entry Costs: These are the costs of actually spitting the block into separate titles. For example, Stamp duty, Legal Fees, Contribution fees, engineering and surveyor fees, municipal water fees. Fees vary widely depending on municipal authorities in the specific area and lot specific issues to be dealt with.

Holding costs: these are the costs of simply holding the land over time. For example, Land tax, Municipal Rates, mortgage interest.

Construction costs: Dependent if construction is within the scope of the sub-division project, these costs obviously need to be taken into consideration and will be substantial.

Exit costs: this may include items required move yourself from title. These may include Selling agent fees, lawyers fees, Capital gains tax or personal tax, etc.

Structure

There are many facets in determine the correct structure for a sub-division project. Largely, the two principal factors will usually be in (a) who your partners to the project will be, and (b) what you want the end result to be (i.e. to retain, sell or a combination of both). With relation to the latter, taxation is usually a deciding factor. Speak to us to assist in determining if the project should be done in your personal name, company, trust or joint venture

Can I sell before the land sub-divides?

In short, yes, as long as you have made the appropriate initial steps with your land surveyor in drawing up plans and obtaining basic approval. This is known as an “off the plan” sale. Call us to discuss this further.

Note that it is sometimes a lending requirement that a certain percentage of lots are presold before a bank will provide funds to a sub-division and building project.

Please note – information given above is ‘general in nature’ only and you should seek legal advice in relation to your particular circumstances before acting.