When purchasing a development site in Brisbane, including a strong due diligence clause for developers is essential. It gives you the time, access, and flexibility to fully assess the site before you commit. But not all clauses are created equal, and using a recycled or vague clause could cost you significantly down the line.

In this guide, we’ll walk through what makes a due diligence clause effective, the elements every developer should include, and how a well-drafted clause can help reduce risk in your property contracts.

What is a Due Diligence Clause for Developers?

A due diligence clause allows the buyer – usually a developer – to carry out investigations into a property before the contract becomes unconditional. If the results aren’t favourable, the clause allows you to walk away from the deal without penalty, often with your deposit refunded.

The clause typically gives you a set period (commonly 14 to 60 days) to perform investigations such as:

• Planning and zoning checks
• Feasibility assessments
• Infrastructure availability
• Title, easement, and covenant reviews
• Environmental and flood risk analysis

Why Developers Can’t Rely on Generic Clauses

Not all due diligence clauses provide the same level of protection. Many developers use clauses they’ve picked up from previous transactions without reviewing whether they’re suitable to the particular transaction. But this approach is risky.

Some clauses limit your investigations to specific issues like heritage restrictions, while others lock you in unless a very narrow condition is triggered. In contrast, a well-drafted due diligence clause for developers gives you broad discretion to assess the project from every angle, including feasibility.

Key Elements to Include in a Due Diligence Clause

1. Discretion to Terminate

The clause must clearly state the standard under which you can terminate:

• Absolute discretion allows you to withdraw from the contract for any reason during the due diligence period. It’s the most developer-friendly option.
• Reasonable discretion requires that your reason for terminating be objectively justified, opening the door for potential dispute.

Our recommendation? Always push for absolute discretion if you’re the buyer.

2. Scope of Investigations

The broader your right to investigate, the better. For a developer, consider this wording:

“This contract is subject to the Buyer being satisfied in its absolute discretion with the outcomes and results of all of its due diligence inquiries relating to the Property and the Buyer’s proposed development by the date ______ days after the Contract Date (Due Diligence Date).”

This language enables you to assess feasibility, market conditions, services, council processes, and other commercial risks—not just zoning or overlays.

3. Site Access During Due Diligence

You may need physical access to the site to complete inspections, surveys, or testing. Make sure your clause includes:

• Clear rights to enter the property
• Permission to bring consultants
• Notice periods for access (especially if tenanted)
• A commitment not to cause damage

Without this access, your ability to properly assess the site can be severely limited.

4. What Happens If You Miss the Notice Deadline?

The clause should outline what happens if you don’t notify the seller before the due diligence period expires. Common options include:

• Ongoing termination right (recommended): Either party can terminate until the buyer gives notice
• Automatic termination: Courts often deem these clauses unenforceable
• Deemed satisfaction (not recommended): You’re locked into the contract unless you terminate, even if you were still negotiating or waiting on advice.

The Consequences of a Poorly Drafted Clause

Without a strong clause, you risk:

• Being locked into an unworkable or unprofitable site
• Losing your deposit or being sued for failing to settle
• Delays in obtaining approvals or financing due to unforeseen issues
• A costly and avoidable legal dispute

Engaging an experienced Brisbane property lawyer to draft or review your contract can prevent these issues before they arise.

How Long Should Your Due Diligence Period Be?

For residential contracts, 14 days is a typical timeframe. However, for development site contracts, we recommend a minimum of 30 days. This gives you time to:

• Book a pre-lodgement meeting with the council.
• Engage your town planner, surveyor, and civil engineer.
• Run financial models or arrange lender feedback.
• Uncover any hidden risks in the site or local overlays.

A rushed clause is rarely in your favour, so make sure your timeline suits the complexity of the site.

Why Brisbane Developers Choose Us

At Brisbane Property Lawyers, we understand the property development process from start to finish. We work exclusively in property law –  meaning we know the difference between a clause that’s “close enough” and one that truly protects your interests.

We can draft custom due diligence clauses, review existing contracts, or negotiate more favourable terms – all while providing you with practical, plain-English advice.

Need Help With a Development Contract in Queensland?

Whether you’re purchasing your first site or developing multiple lots, we can help protect your position with commercial, development-ready contract conditions.

We offer a free initial consultation. Get in touch with us today on (07) 3266 3843 or request a free quote.