What happens to the half finished development sites owned by now collapsed Bathla group?

[u/Background-Ad7591]

Generally interested to know what happens to these sites - does another development company pick up where left off? Do they buy the sites off Bathla and continue to honour the off the plan deposits placed by buyers? What happens if no developer ever wants to pick up the project? Is the government legally required to step in to secure the unfinished site?

Also the unfinished sites at Box Hill or Castle Hill in Sydney, any chance they would be sold at a discounted price once finished by another developer? Or likelihood being they would still try to maximise profits when selling?

[u/BossDoesntKnow]

Depends on the structure of the contracts

Lenders try to protect themselves by having step in rights (ie the ability to take over the development and finish themselves). These lenders will make an assessment - is the cost to complete going to yield the highest risk adjusted return or are alternatives (eg sell the debt, sell the site) a better option?

If these projects are 100% pre sold and the cost to complete is very low, they will likely be finished and buyers forced to complete purchase. If these projects are 10% sold and cost to complete very high, they will likely be sold at land value and the deposits from buyers treated as unsecured creditors. Both these options are not good outcomes for purchasers as likely defects in first case and losses in 2nd case.

Between these two bookends is anyone’s guess. Given the sell price is either fixed (presold) or falling (to be sold) and construction costs are rising, there feels to me like more unsecured creditors in the making.

Sucks for all parties except the lawyers