When Neighbours Become Co Sellers: Common Pitfalls in Amalgamation Deals With Developers

This article unpacks the most common pitfalls in amalgamation sales across NSW, QLD, and VIC, with a key message: these are not standard property deals, and should not be treated like one. It is essential to engage a property lawyer and real estate agent with proven experience in amalgamations.

What Is an Amalgamation Sale

An amalgamation sale is where two or more neighbouring property owners agree to sell their lots as a combined development site, typically to a developer seeking greater scale or better planning outcomes.

They have become more common in areas undergoing rezoning or density uplift—think Sydney’s low and mid rise housing reforms, or major transport corridors in Melbourne and Brisbane. But behind the potential windfall lies a minefield of legal, tax, and planning issues that can derail a deal unless managed carefully.

Pitfall 1: Lack of Coordination and Commitment Among Owners

Different timelines, different goals

One owner wants a quick exit, another wants to hold out for top dollar, a third may be ambivalent altogether. Without clear alignment, progress stalls.

No formal agreement in place

A verbal agreement or informal chat is not enough. A Memorandum of Understanding (MOU) is essential, and should outline:

• Who is part of the group, and how new owners can join
• How decisions will be made
• How legal and agency costs are shared
• What happens if someone pulls out
• How sale proceeds are to be split

It is not about mistrust—it is about ensuring a clear and consistent framework from the outset.

Pitfall 2: Using the Wrong Professionals

This is not your average house sale

One of the most common missteps is using the same lawyer or agent you would call for a simple residential sale. Amalgamation sales are entirely different. They require:

• Complex multi party negotiations
• Structuring around due diligence and call options
• Coordination of settlements
• Navigation of GST, CGT, and stamp duty implications

An experienced property lawyer and real estate agent familiar with amalgamations are not optional extras—they are critical to holding the deal together and protecting your interests.

Pitfall 3: Contracts That Create More Problems Than They Solve

Developer drafted, developer favoured

When developers come to the table, they often bring pre drafted contracts—usually written to suit their own position. These often include:

• Call options that give them flexibility to walk away, while locking you in
• Conditional terms based on rezoning, DA approval or finance, often with broad timeframes and minimal obligations
• Exit clauses that favour the buyer if one property falls through, leaving the rest in limbo

It’s essential that each owner is properly informed of the implications of these contracts, as well as advised on potential options or alternatives.

Each owner will typically sign a separate contract, but these contracts must also be coordinated in terms of price, conditions, and timing. Inconsistency between them can unravel the entire arrangement.

Pitfall 4: Assuming Smooth Planning or Rezoning Outcomes

Rezoning is never guaranteed

Just because your suburb is on the council’s growth radar does not mean approvals are straightforward. Planning outcomes are subject to community objections, infrastructure constraints, or shifting council priorities.

In NSW, the rollout of mid rise housing changes has created opportunity but also uncertainty. In QLD and VIC, overlays, infrastructure contributions, and stormwater requirements can impact feasibility or delay DA approvals.

If the deal is conditional on planning approval, timelines must be clear and enforceable, and risks shared fairly between parties.

Pitfall 5: Settlement and Legal Execution Issues

One holdout can hold up everything

In many amalgamation deals, contracts are structured so that settlements occur at the same time. If one owner is delayed—or worse, defaults—it can jeopardise the whole transaction.

Title and planning issues left too late

Unexpected easements, covenants, caveats, or boundary anomalies can throw a spanner in the works. These must be identified early through comprehensive due diligence.

How to Avoid These Pitfalls

1. Engage the right professionals early
   Use a property law firm and selling agent with proven experience in amalgamated deals. This can make or break the transaction.
2. Document your agreement from the start
   A well drafted MOU provides structure and avoids misunderstandings.
3. Ensure consistency across all sale contracts
   Timing, conditions, deposits, and price must align across the board.
4. Do legal and planning checks early
   Identify any title issues, easements, overlays, or caveats before you go to market.
5. Get tax and structuring advice
   Capital gains tax, GST and stamp duty treatment should be considered before you sign anything.

Final Thoughts

Selling as part of an amalgamated site can be a rewarding opportunity—but it comes with unique risks and responsibilities. These are not simple sales, and they are not all about price. They require careful planning, coordination, and experienced advice.

If you are considering an amalgamation deal, make sure you are supported by professionals who know this space and can guide you through the process confidently.

Looking for guidance on an amalgamation sale in NSW, QLD, or VIC
At Jaide Law, we specialise in property law and development site transactions. We understand the risks, the timelines, and the details that can turn a good opportunity into a great outcome. If you want responsive legal work, relatable advice, and transparent fees from one of the best property law firms in NSW, get in touch with us today.

Disclaimer – We know most of you get this, but just to be clear, the information above is general and does not consider your unique situation. Please do not rely on it as a substitute for professional advice. We strongly encourage you to seek appropriate guidance for your specific needs.