VIC Fencing Contribution - Can I send the developer a Fencing Notice?

[icebear]

Hello, I have what I hope will be a simple query regarding whether or not I can make the developer pay their share for the dividing fence of the adjoining property.

I purchased vacant land 2 years ago, directly from the Developer when the Plan of Subdivision was still untitled. Fast forward to today, I am nearing construction completion of the home, and soon I will need to erect the fence on the boundary. The 2 blocks of land that adjoin my property on either side remain vacant, and I am aware that both lots remain unsold (ie. the Developer is still the Vendor of both lots). The below 2 clauses I've pasted from the Contract of Sale is confusing me.

I am interpreting from 20.3 that the Developer has protected themselves from any fencing claim in the event that they are unable to sell any lots. However, if this were the case, I would have thought that there is no need for Clause 20.2 to be inserted into the contract as it is directly related to this situation, because Clause 20.2 will allow the Developer to adjust the cost of the fencing against my future neighbour when they end up buying the vacant land. I am of the opinion now that the Developer is obliged to pay me half of the fencing costs due to Clause 20.2 and also the wording "Except as otherwise provided in this Contract" which implies that Clause 20.2 is relevant to this situation.

Can someone please advise and clarify, much appreciated.

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20.2 If before the Settlement, the Vendor or the Developer has received or contributed to one or more fencing notices from the owners of land adjoining the Property:
(a) the Purchaser will be liable for the Vendor's and/or the Developer's share of the cost that is set out in each of the fencing notices; and
(b) the Purchaser will pay to the Vendor and/or the Developer (as the case may be) on the Settlement Date the Vendor's share of the cost that is set out in each of the fencing notices, by way of an adjustment in the Vendor's favour, as reimbursement for the contribution which the Vendor has made or will be required to make under the fencing notices.

20.3 Except as otherwise provided in this Contract, the Purchaser agrees with the Vendor and the Developer that so long as the Vendor is registered or entitled to be registered as the proprietor of any land adjoining the boundaries of the Property the Purchaser will not make any claim against the Vendor and/or the Developer for any contribution to the cost of erecting any dividing fences or walls pursuant to the provisions of the Fences Act 1968 (Vic), including any sums which the Vendor and/or the Developer may (whether or not it is aware of any) have incurred with any adjoining owners.

 

[Rob Legat - SBPL]

The effect of the clauses can be summed up as: you can’t make the developer contribute to the cost of fencing, but if they do decide to do so then they can pass the cost on to the person who does buy the block in the future (assuming a mirror clause 20.2 in that further contract(s)). Pretty standard stuff for developer contracts, as they don’t want to get hit with a ton of fencing claims, and they also don’t want to be stuck with the cost if for some reason any of those claims get through.

 

[icebear]

The effect of the clauses can be summed up as: you can’t make the developer contribute to the cost of fencing, but if they do decide to do so then they can pass the cost on to the person who does buy the block in the future (assuming a mirror clause 20.2 in that further contract(s)). Pretty standard stuff for developer contracts, as they don’t want to get hit with a ton of fencing claims, and they also don’t want to be stuck with the cost if for some reason any of those claims get through.

Thank you Rob for the response. With that being said, am I within my rights to send an invoice to the Developer for their share, however it will be at their discretion whether they will pay me or not?

I would have thought that the Fences Act 1968 including the 2014 Amendments would sit above and supersede the terms of my Contract of Sale. The Act clearly stipulates each parties' obligations for fencing in that each must pay half their share. Isn't the Vendor not allowed to bypass a legislation by contracting out of it?

Upon further review of the wording of 20.3, it also says that "so long as the Vendor is the registered proprietor". Doesn't this mean that once the land has been sold, they are no longer "the registered proprietor", enabling me to submit the claim which they are then obliged to reimburse me for?

 

[Rob Legat - SBPL]

I'm not familiar with the Victorian Act (or Victorian property law as I only practise in Queensland) - but I understand the principles are similar across the states. With that in mind, I've had a quick check of the Fences Act and see:

- Section 7 allows parties to make an agreement about 'other proportions' for contribution. The contract falls into that category of an agreement, and 'zero' is a proportion.

- Unless the fencing work is urgent, the process is that you're required to give notice and get consensus as to contribution before building the fence. Otherwise, you can't recover any of the cost from the neighbour. The process if you don't have agreement is to seek an order in the Magistrates Court - again, before conducting the fencing work. So no, I doubt you can do it and then make a claim.

- What constitutes 'urgent fencing work' is in section 23. This requires: (a) that it needs to be carried out urgently (slightly obvious, not really helpful), and (b) a dividing fence on the land has been damaged or destroyed, and (c) it is impracticable to give a fencing notice to the other owner. (b) definitely kills your chances, and (c) is a solid backup to that.

I'd also wager that as a developer they've probably seen people try everything to get them to pay, and also as a developer I'd pretty much guarantee they've got an iron-fisted hold on the purse strings. I don't like your chances.

 

[Rod]

I don't like your chances.

Me too.

The Fences Act explicitly allows contracts to override the Fences Act.

You are stuck with the contract.

Very common problem on new estates.