The Transport Oriented Development and Well-Located Housing SEPPs have triggered a surge of interest among developers, leading to a frenzy of activity akin to a gold rush.

Developers are increasingly reaching out to homeowners with offers to secure “Option Contracts” for the future purchase of their land.

It’s crucial for homeowners to approach these “Option Contracts” with a healthy dose of skepticism. Here’s why:

Why Option Contracts are Detrimental for Homeowners

• Low-Cost Land Control: Developers secure land at a low cost, which may undervalue the homeowner’s property.

• Non-Binding for Developers: Developers can back out without penalties, leaving homeowners in limbo.

• Binding for Homeowners: Homeowners are obligated to sell only to the developer, to the exclusion of all others and only if the developer chooses to exercise the option for the duration of the option contract. If the homeowner’s circumstances change they cannot go to the open market to get an urgent sale.

• Fixed Purchase Price: The price is fixed at the time of the contract, potentially resulting in a sale below future market value.

• Loss of Control: Homeowners lives are put on hold, subject to the whim of a developer till the option expires.

While Option Contracts might seem appealing due to the potential for a quick and easy cash, they primarily benefit developers.

Homeowners should thoroughly understand the implications and consider seeking qualified legal and financial advice before entering into such agreements.