Rough surf: Torquay lot holders in the dark about plan to sell land

LOT holders in a proposed Torquay development say they are in the dark and upset about a sudden decision to sell the land out from under their feet.

Between 2015 and 2017, 42 people paid deposits of about $15,000 to secure their place in Stage 7 of the Surf View estate, which developer Ironbridge had slated to build on six hectares of land at the south end of Longboard Avenue.

Ironbridge went broke during the course of several legal battles with neighbouring landowners, and KordaMentha became receivers and managers of the land, known as Lot H, in 2017. Balmain Private then became the mortgagee in possession of Lot H.

Apart from some sewerage infrastructure, the land remains undeveloped.

Acting on instructions from Balmain Private, Melbourne real estate agents Biggin & Scott Land advertised the entire site and its 42 lots for sale earlier this month, but the first that many of the lot holders knew about this was when a “For Sale” sign was set up on the property (it has since been removed).

“There’s no information, everyone just passes the buck,” David McLaws said. “If it’s convenient for them, they’ll tell you something and then all of a sudden it’s like ‘I don’t know anything about it’.

“I still haven’t received anything saying the contract is void. We were getting letters from KordaMentha last year saying that they still intend on developing the site.”

Jess Kennedy put a deposit down at the start of 2016 and said she was told her block would take about a year to be ready, so her family moved out of a rental house and in with her parents to help save money.

“We were told then there was a range of issues that came up – I can’t even remember which order – but there was some delay.

“So we started renting, we rent on the south side; you can see this from our balcony.”

She said her family had since bought land in Wensleydale but still hoped to build on the Surf View block one day.

“We’re very upset at the idea some developer, and a whole chain of people, think that they can come in here and sell and develop this area when it’s already sold to be developed.”

The land itself is worth much more now than it was in 2017, and the lot holders fear a new buyer will not honour their contracts with Ironbridge and only entitle them to get their deposit back.

Sunset clause provisions are commonly found in off-the-plan contracts to allow developers to cancel the contract where the plan of subdivision has not been registered by a specified date.

The state government passed laws in 2019 protecting buyers from developers deliberately postponing the completion of construction work in order to cancel signed contracts using an existing sunset clause and then re-sell the property at a higher price, but this is only backdated to August 23, 2018.

Member for Western Victoria Stuart Grimley has been following the issue and made a speech about the Surf View estate in state Parliament earlier this month.

“It mystifies me that land can be sold when there are 40-plus active contracts that have not even had a sunset clause exercised,” he said.

“It is also frustrating that no caveat can be applied by these landowners because the land has not settled.

“Some of the landowners are now keen to put their money together and apply for a loan to complete the development. They want to keep their blocks, and they rightly do not want to pay over double their contract price to keep them.”