Land Transactions Law
You act for Developer Pty Ltd which is a property developer with a long record of successful townhouse redevelopments in the Warringah area. In fact the directors of Developer Pty Ltd have recently come to you with another such project in mind. In this regard Developer Pty Ltd is investigating the feasibility of a particular proposed townhouse redevelopment, which would entail the amalgamation of three residential lots in an older and more established dormitory section of Warringah (each lot is currently zoned residential 2c). The directors of Developer Pty Ltd inform you that the company is already the registered proprietor in fee simple of two such lots, namely lots 1 and 2 in deposited plan 1234567, and accordingly the company now seeks to obtain an option to acquire in fee simple the third lot, namely, lot 3 in deposited plan 1234567. It is intended the term of the option would be approximately commensurate with the interval of time required for the lodgement and (anticipated) approval of a D.A., and otherwise the successful outcome to various sundry enquiries as to financial feasibility and other factors generally governing the proposed townhouse development.
With these matters in mind you are instructed the option price will be $8,000.00, and the exercise price will be $600,000.00; and further in the event the option is exercised by the grantee or its nominee the option price shall be credited against the purchase consideration, but in the event the option lapses the option price will be forfeited.
You are also instructed that during the currency of the option Developer Pty Ltd, its servants and agents, including, but not limited to, surveyors and architects, may have access to the subject land at any reasonable time, but subject to the giving of prior notice, for the purpose of further investigation into the suitability of the land for townhouse redevelopment. Equally, the grantor agrees to promptly consent to any D.A. (or other relevant municipal or related application) which Developer Pty Ltd may desire to lodge with Warringah Council during the currency of its option.
Additionally, the option may be exercised no earlier than four months and no later than eighteen months from the date of execution although the latter time constraint may be extended by the grantee or its nominee to two years upon the payment of a further consideration of $1,500.00 (which sum shall also be credited against the purchase price in the event of a valid exercise of the option, or forfeited in the event the option lapses). Finally, the grantor is to acknowledge the entitlement of Developer Pty Ltd to lodge a caveat during the currency of the option.
Draft the Deed of Option.
2a. Outline, and discuss the efficacy of, the vendor disclosure obligations relevant to grantors of options over realty in New South Wales.
(word guide: 2500)
2b. In cyber-space the buyer of realty has even more reason to beware . Will the advent of electronic conveyancing procedures have any effect on the balance between the competing principles of caveat emptor and vendor disclosure? Support your answer with reasoned and principled argument.
(word guide: 1500)
Each Part is of equal value.