Matter value

$14.2m gross development value

A first-time developer turned a 1,200 square metre Glenfield site into 11 dwellings under the Auckland Unitary Plan. We acted on the acquisition, the development structure, the unit titling, and the off-the-plan sales contracts.

The challenge

The client, a building contractor with 20 years of new-build experience but no previous role as a developer, had identified a 1,205 square metre site in Glenfield zoned Mixed Housing Urban under the Auckland Unitary Plan. <!-- ADAM: confirm zone classification and address generality. --> The site supported 11 attached townhouses on a single lot through resource consent. The client had a builder's instinct for the project but limited experience with the legal and structuring side.

The full picture had four legal workstreams. The acquisition itself, on a contract that the seller wanted unconditional within 30 days. The development structure, including a special purpose vehicle, a separate land owning entity, and the appropriate creditor protection between them. The unit titling, which would happen at completion two years out and would convert the single freehold title into 11 unit titles plus a small common property. And the off-the-plan sales contracts, since the client wanted to start presales 14 months before practical completion to satisfy the bank's pre-sales requirement.

What we did

We structured the project across two entities. A landowning company held the freehold. A development company held the building contract and the project finance. The two entities were linked through a development management agreement that allocated risk appropriately and let the client unwind one without unwinding the other.

On the acquisition we negotiated the 30-day condition into a 45-day condition with three explicit due diligence outs: clear access for the builder's vehicles to all 11 lots, geotechnical confirmation of build-suitable ground, and a confirmed resource consent from Auckland Council. We waived the conditions on day 41 and settled on day 60.

On the unit titling we drew up the proposed unit plan early so the off-the-plan agreements could attach an indicative plan as Schedule One. The agreements were structured as standard ADLS off-the-plan unit title contracts with sunset clauses set to 24 months from agreement date and a pricing adjustment mechanism if the development was delivered more than six months late. The deposit terms were 10 percent on signing held in the law firm's trust account, with a further 5 percent on completion of the foundation slab. <!-- ADAM: confirm the deposit structure used. -->

On the development financing we coordinated with the client's bank to ensure the security package, the pre-sales requirements, and the settlement mechanics all aligned with the off-the-plan contract terms.

The outcome

Eight of the 11 units sold off the plan within seven months of presales opening, hitting the bank's 60 percent pre-sales requirement. <!-- ADAM: confirm sales pace. --> The remaining three sold during construction. The development reached practical completion 22 months after acquisition. Unit titling was registered at the Land Registry on the morning of the first settlement. All 11 settlements completed within a four-week window. The client repaid the development loan in full and netted approximately 18 percent on cost. <!-- ADAM: confirm the actual margin. -->

The client is now scoping a 24-unit development in Albany using the same legal structure.

Key takeaway

First-time developers benefit most from getting the legal structure right at the start. The land entity, the development entity, and the relationship between them needs to support the financing, the construction risk, and the eventual sales. Off-the-plan contracts need to lock in the pricing while protecting the developer if delivery slips. Unit titling is a registration sprint at completion that reads like a year-long process: most of it is preparation. Getting the unit plan locked in early is the single most useful thing a developer's lawyer can do for the project timeline.

Context

We act for developers across the upper North Island, from first-time small site projects through to multi-stage subdivisions. The smaller end of the market in Auckland is healthy at the moment, particularly in the Mixed Housing Urban and Mixed Housing Suburban zones.

If you are a builder or investor looking at your first development, the legal structure is what determines how recoverable the project is if something goes sideways. We do this work on a fixed fee that scales with project size.