Case Study: The Importance Of Checking For Building Permits
You might remember seeing a news article in September 2018 about a Melbourne man who had purchased a home with illegal building works. Click here to read more.
Hao Dong had purchased the property at auction 2 years before and after a complaint that it was being used an unregistered boarding house, the council investigated and issued a notice that most of the house was built without the proper permits.
Let’s take at some of the mistakes that Hao made and how you can avoid them when purchasing your property.
“[The real estate agent] didn’t mention anything so I assumed everything [was] legal”
There are a few mistakes that Hao has made in this situation
- Relying on representations (or lack thereof) from the real estate agent. The real estate agent is ‘selling’ the property and beyond taking you through the property and showing you the features, you should refer all legal questions to your lawyer.
- Don’t assume anything about a property. It is likely that the Vendor in this transaction knew that they needed (or might have needed) a permit for all (or at least some) of the works on the property. They deliberately didn’t disclose that fact.
- Be an engaged purchaser. If you look at the photos of the property then you will see pretty quickly that there is a difference between the original building and the add ons. Quite simply they look different. If you notice that the character of the home is different in the external buildings then ask the question and get confirmation.
Click here to read our tips for dealing with real estate agents.
Now that we know what Hao did wrong, let’s take a look at 4 steps you can take to avoid making the same mistakes.
- Check that the character of the home is consistent. Be aware at open for inspections. It is completely normal to have a detached garage, but does it look like it was built at the same time as the house? Have they aged the same? If the house is weathered but the garage looks brand new then it may have been built at a later date. Did the Vendor have a permit for the new building?
- Start asking questions. If you believe that there are additional building works on the property, start asking tough questions. The real estate agent will be able to direct you to the Vendor’s lawyer. Get confirmation from the source that any works on the property were completed using the proper procedure.
If we have learnt anything from Hao’s experience it is that whilst the Vendor-Purchaser relationship doesn’t have to be adversarial, it should be viewed professionally. Not everyone selling a property is doing so honestly.
The most important thing you can do when inspecting a property is talk to your lawyer before you sign on the dotted line. Avoiding these sorts of problems before you purchase the property is so much easier than dealing with them during the settlement period or in the future when you own the property.
To read more about the consequences of not having a building permit please click here.