How to Sell Your Property as Part of a Development Site: What Every Owner Considering an Amalgamation Sale Needs to Know

Your Suburban Backyard Might Be the Next Big Thing

If your home is in a well-positioned part of Sydney—particularly near a train or metro station in suburbs like Redfern, Dulwich Hill, St Peters or Leichhardt—it’s likely your property is now worth a lot more than it used to be. Thanks to recent changes to NSW planning laws, that quiet cul-de-sac could suddenly be of serious interest to developers. With new housing reforms now in effect, certain low-density residential areas are being rezoned to allow for higher density development and that means big opportunities for homeowners.

If you’ve been approached by a real estate agent or developer, or your neighbour has hinted at a joint sale, you might be in line for what’s known as an amalgamation. Before you get caught up in the excitement, it’s worth understanding what this actually means and what’s involved from a legal perspective.

The Government’s Grand Plan: Why Developers Are Circling

In 2024, the NSW Government introduced new planning reforms to tackle the housing shortage. Under the Low and Mid-Rise Housing Reforms and the Transport Oriented Development Program, certain residential blocks near public transport (usually within 400m to 1.2km of a station) can now be redeveloped into medium-density housing, such as small apartment buildings or townhouse complexes.

This shift has created demand for consolidated land parcels. Developers need space often upwards of 1,000sqm to make a project stack up. Cue: multiple neighbouring homes sold together as a development site. Enter the amalgamation.

What’s an Amalgamation Sale Anyway?

An amalgamation sale is when two or more adjoining landowners agree to sell their properties together to a developer. By combining lots, the site becomes viable for more intensive development. This often means a higher sale price per property, especially when the site falls within a newly upzoned area.

In short, your three-bedroom home might be worth more as part of a townhouse site than it ever would be on its own.

Step One: Check Your Zoning Before You Pop the Champagne

Before jumping into any sale talks, it’s essential to confirm whether your property actually sits within a rezoned area. Here’s how to check:

• Head to the NSW Planning Portal and use the Spatial Viewer to search your address and view your property’s zoning, height and floor space ratio controls.
• Contact your local council’s planning department to confirm whether your area is affected by the new reforms.
• Engage a town planner or planning consultant for a more detailed feasibility assessment.

Getting the Neighbours on Board (Without Losing the Plot)

The first real hurdle in an amalgamation sale is getting everyone aligned. If you’re part of a row of properties being approached by a developer, coordination is key.

Neighbours will need to agree on a number of terms, including:

• Whether to sell as a group
• Which real estate agent to appoint
• How to handle offers and negotiations
• Pricing expectations and timeframes

This is where things can go sideways if not handled properly. A well-drafted Memorandum of Understanding (MOU) is critical to keep everyone on the same page. It outlines the process, responsibilities, and what happens if someone pulls out. It’s essential to have a lawyer experienced in these types of transactions prepare the MOU as generic templates won’t cut it. The goal is to protect all parties and avoid disputes that can derail the deal.

The Developer Offer: Looks Good, But Read the Fine Print

Once a developer shows serious interest, things can start moving quickly. The buyer may propose one of several deal structures:

• Call Option: Gives the developer the right (but not the obligation) to buy the property at a later date.
• Delayed Settlement: Settlement might be pushed out 6 – 12 months to allow time for development approval.
• Conditional Contracts: The purchase may be subject to rezoning, DA approval, or finance.

These terms can offer flexibility, but they also carry risks. Owners need to understand exactly what they’re signing up for and what happens if the developer walks away.

Contracts: Not Your Standard Saturday Sale

Each property in the group sale will require its own contract for sale. These contracts should be carefully coordinated across all owners to ensure:

• Consistent terms (price, deposit, timing, conditions)
• Proper GST and tax treatment
• Clear conditions that reflect the negotiated deal

In some cases, a separate deed may be needed to tie all contracts together. Legal advice is crucial here, particularly when dealing with non-standard sale terms or buyer-drafted documents.

Behind the Scenes: What Happens Before Settlement

Even after contracts are exchanged, there can be legal work required before settlement can take place. Common steps include:

• Reviewing and registering easements or covenants
• Coordinating settlement timing across multiple vendors
• Responding to developer requests (e.g. access for surveys or DA preparation)
• Satisfying any agreed conditions precedent to settlement

These pre-settlement issues can create delays if not managed proactively, especially when multiple owners are involved.

Settlement Day: Orchestrating the Grand Finale

Once all conditions are met, the deal moves to settlement. When there are several properties involved, all contracts typically settle simultaneously. If even one party is delayed or non-compliant, it can impact the whole group.

This makes it especially important to have legal support coordinating with the developer’s lawyer and the real estate agent to ensure everything runs smoothly.

Don’t Wing It – Amalgamation Sales Are Not DIY Deals

It’s tempting to assume that this is just like a regular property sale, but the reality is much more complex. You’re dealing with more parties, longer timelines, and higher stakes. There’s a lot of value on the table and just as much potential for things to go wrong without proper legal advice.

Legal risks to watch out for include:

• Poorly drafted or mismatched contracts between neighbours
• Ambiguous or unfair option agreements
• Disputes over sale proceeds or timing
• Tax treatment errors (especially around GST)
• Developers pressuring owners to sign quickly without advice

These aren’t theoretical risks we see them play out in practice when deals are rushed or poorly managed.

Ready to Explore an Amalgamation Sale?

If you’ve been approached by a developer, or you’re considering joining forces with your neighbours to sell your site, don’t go it alone.

Get proper legal advice with a lawyer experienced in amalgamation sales before signing anything. It could be the difference between a smooth, profitable sale or a frustrating legal headache.

To discuss your options, book a free 15-minute call with Jaide Law. We help homeowners across Sydney and NSW navigate complex sales with clarity, confidence, and fixed-fee transparency.

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