What is a Joint Venture?
A Joint Venture is a business entity that is created when two or more parties collaborate for a common goal, in this case, for the purposes of carrying out a particular development project.
A typical Joint Venture with Bayswater Property Group (BPG) is where the property owner brings the land component to the development & BPG brings over 20 years of experience in providing all the necessary resources to complete the project.
These “resources” include property research, design & planning, funding the build, through to construction and registration of titles at the end of the project.
What is a Property Partner?
A property partner is any person or entity who enters into a property Joint Venture with BPG.
What does Bayswater Property Group do?
BPG does all things related to property development from:
Property research - identifying zoning / infrastructure / transport changes
Acquisition (sourcing sites) - generally at below market price as well as helping obtain finance for the acquisition, if needed
Design – working with experienced consultants to get the best use out of the site
Planning – working with all the relevant authorities to obtain DA Consents & CC approvals
Delivery – constructing compliant buildings to the highest standards
Registration of Titles - with the LPI once the development is complete
Sales & Marketing – co-ordinating this process with the best team to achieve the best possible results
What is a Duplex/Dual Occupancy Joint Venture?
This is where BPG partners up with the owner of a property to build a Duplex (Dual Occupancy). Simply put, the property owner contributes their property/land to the development project & BPG provide the balance. From design & planning right through to registration of titles – with all expenses generally covered by BPG.
What is a Medium Density Joint Venture?
The term “medium density” refers to three or more dwellings, so for any land that permits this, a medium density joint venture is where BPG collaborates with a land/property owner(s) or entity to develop their land into a medium density development.
What is a Strata Plan Joint Venture?
This is a Joint Venture that is undertaken with BPG and the individual owners of an apartment block and their Strata Plan. A typical scenario would be for BPG to cover the costs of renovating and refurbishing both the interior and exterior of tired, out dated and out of code apartment blocks and individual units in exchange for “air space” above the building, allowing the creation of additional units.
What happens if we enter into a Joint Venture with you and the builder dies or goes bankrupt?
If the builder dies or goes bankrupt there is a compulsory insurance called Home Warranty Insurance (HWI) that is required as part of the Construction Certificate application, and this covers the owner in this instance.
If death of the builder does occur, there are two nominees listed in the contract to who are able complete the project. If either of the two nominees is unfit to complete the works for whatever reason, then the HWI also covers this.
How will my interest/my property be protected?
As noted above, Home Warranty Insurance (HWI) is a compulsory insurance that needs to be taken out prior to the issue of a Construction Certificate and the commencement of the build. This protects the land/property owner in the case of any unforeseen circumstances.
It is important to note that in over 20 years, Bayswater Property Group has never had a HWI claim lodged against us.
What happens to the title of my land when the properties are split? Will it become a Strata title or a Torrens title?
This is largely dependent on your local council and the controls that fall under that particular council. Your land will either have its own title (Torrens Title), be part of a Strata Title or a Company Title.
As an example, Bankstown City Council only permits Dual Occupancies on land greater than 500m, and where two or less buildings are constructed, this forms part of a Torrens Title duplex.
In Randwick Council, anything greater than 450m but less than 800m would become a Company Title and anything above 800m would be a Torrens Title.
BPG will always advise you before the commencement of any project what the end outcome will be with regard to titles.
What will my out of pocket expenses be?
In most instances there are no out of pocket expenses to be paid by your, other than the costs associated with obtaining your own independent accounting and legal advice, which we always recommend.
All other costs are covered by Bayswater Property Group. In many instances BPG also offers a substantial cash back to owners, in addition to covering all pre-development and development costs.
What are the tax implications of Joint Venture, such as Capital Gains Tax (CGT)?
The usual CGT rules apply depending on whether the property is your principal place of residence or an investment property. Each joint venture partner must seek independent accounting advice.
What about GST? Is that payable?
GST payable on the project is generally covered by Bayswater Property Group, but this depends on the accounting and legal structure agreed to by our legal and accounting professionals.
What implications will the Joint Venture have on the value of my property?
In most instances the completed product will have an end value of approximately 10% greater than your existing dwelling, in the case of a Dual Occupancy, not to mention the added benefits of the cash back incentives, which add a great amount of additional value and/or reduce your mortgage over the property.
When it comes to Medium Density and Strata Joint Ventures, each development will be different, however individual owners are always compensated so that the end value of unit and/or unit entitlement is always substantially higher than their existing one.
In a Dual Occupancy Joint Venture, who will own the second dwelling?
On completion, Bayswater Property Group will have the right to either retain the second dwelling or on-sell it to cover the project costs.
How long will the build take?
For a Dual Occupancy, the build process can take anywhere from 6 to 12 months depending on the complexity of the build and the site conditions.
For Medium Density and Strata developments, depending on the complexity and size of the build, 12-18 months is generally the build duration.
Where will we live during the build?
If you are living in the property which is being redeveloped and have no family or friends to move in with, Bayswater Property Group can help source a rental property and assist with the relocation. We have a large database of real estate agent contacts that we have developed over the years. The rental and relocation costs can also be covered by a portion of the cash back component.
Do we get to choose the design of our property?
Yes, of course. You will have a great deal of input with the design by giving Bayswater Property Group a detailed brief of your requirements. Our objective is to deliver you your ideal residence within your local council’s constraints.
Did we cover everything? If not, please let us know what you'd like to ask.