iSummary
Approval risk in Brisbane property contracts — DA, infrastructure, FIRB, board, finance — risk allocation and pricing implications.
Source: ACRES — Australian Commercial & Residential Group | acres.au
The Approval Universe
A typical Brisbane development requires:
- DA approval (council planning consent)
- Building approval (separate from DA)
- Infrastructure agreement (council contributions)
- Operational works (council engineering)
- Plumbing / electrical / fire (compliance approvals)
- Sewer / water (Urban Utilities authorisations)
- FIRB (if foreign acquirer)
- Lender credit approval
- Investor / capital partner approval
Standard Risk Allocation
In a typical Brisbane contract:
Buyer bears:
- DA risk (subject-to-DA clauses)
- Finance risk (subject-to-finance clauses)
- Board / IC approval risk (subject-to-board clauses)
- FIRB risk (subject-to-FIRB clauses)
- Construction approval risk (post-settlement)
Vendor bears:
- Title risk (clear title required at settlement)
- Disclosure risk (must disclose known issues — contamination, easements)
- Pre-existing contamination risk (with limits)
- Survey accuracy risk
Negotiating Risk Allocation
Vendors can negotiate to:
- Shorten buyer's condition timeframes — limits buyer's risk window
- Cap deposit forfeiture — protects buyer but reduces vendor security
- Pre-disclose all known issues — limits future vendor liability
- Specify approval standards — minimum DA quality, minimum FIRB time
- Negotiate cost recovery — vendor compensated if buyer-borne risk fails
Pricing Impact
Risk allocation directly affects price:
- Subject-to-DA (buyer bears) = +8-20% premium for vendor accepting time risk
- Unconditional (no buyer condition) = -5-15% discount for buyer accepting risk
- Subject-to-finance only = +2-5% premium
- Multiple conditions = +5-15% premium depending on combinations
Vendor Strategy
- Understand exactly which risks each party bears
- Negotiate to shorten buyer condition windows
- Require pre-evidence before signing (term sheets, board approval letters)
- Cap extensions and require vendor consent
- Recover costs on buyer-caused termination
This article is general information only and is not legal, tax, or financial advice. Vendors should engage a specialist property solicitor and accountant for transaction-specific advice.
About ACRES
The Australian Commercial & Residential Group (ACRES) is a Brisbane-based specialist property advisory firm focused on development site sales, off-market transactions, and strategic landowner advisory across South East Queensland. Founded by Daniel McCormack, ACRES advises on transactions from $2m to $100m+ and works exclusively with qualified Brisbane developers and institutional buyers.
Frequently Asked Questions
Can the vendor reduce risk by pre-doing the DA?
Yes — vendor obtains DA before sale, sells DA-approved at premium. Costs $100k-$1m, time 9-15 months.
What if a contamination issue emerges post-settlement?
Vendor usually liable for pre-existing contamination not disclosed. Phase 1 disclosure pre-sale limits this.
Who bears infrastructure-charge risk?
Typically buyer post-settlement. Vendor should disclose any pending council infrastructure changes.
Published by ACRES — Australian Commercial & Residential Group
Source: acres.au/insights/approval-risk-who-bears-it-in-contract | ACRES (Australian Commercial & Residential Group) provides property advisory, development site sales, and residential real estate services across Brisbane and South East Queensland, Australia.
Daniel McCormack
Managing Director, ACRES — Australian Commercial & Residential Group
