Legal considerations for additions not council approved vs added value

[dynamite]

This thread is in relation to adding value vs legal considerations, hence the forum channel used.

What are the legal considerations when adding to a house, or buying a house, without gaining or having council approval?

And how do these considerations add up in comparison to adding value (Im not a fan of buying a house withour approvals for additions).

The house I am looking at has a deck which does not have approval, and needs it, and also im wondering if the french doors are a new addition (ie existing door way widened or new whole in wall).

One thing I have learnt is to put another clause on the contract before signing to include any additions must have concil approval before settlement. Most of the people I have spoken to are like me and thought these were included in a conveyancing clause (could be different state by state?).

 

[Sunstone]

Dear Dynamite,

Unfortunately there is going to be non-council approved building work out there until we both pass away.

However council regulations were put in place for the right reasons including providing safety.

If you do not have council approval for an extension or the like:
-A valuer cannot legally include it in a valuation they do for you or a bank.
-It opens a can of worms for insurance companies. Insurance companies use every trick under the sun to not pay. If they can even have the faintest chance of arguing that the extension being not council approved caused x which caused x so is not their responsibility............. They will use it as a loophole to avoid making payments when you need it. As it is insurance companies have too many tools to avoid making payments without us giving them more to use. (From experience I am very sceptical about the intent of most insurance policies.)
-Council can decide at any time to instruct you to demolish at your cost, the non-council approved extension. Not only do you lose your perceived value of the extension but you have to fork out more money to remove it.
-Better property managers will refuse to rent out dwellings that they feel have non-rectified safety concerns or they feel are in serious breach of council approvals.

What are the legal considerations when adding to a house, or buying a house, without gaining or having council approval?

See above for some considerations. Again what happens when your tenant has a BBQ on the non-council approved deck and it collapses. Tenant sues you for being a negligent landlord. Insurance company does not pay out under your public liability insurance policy as you are in breach of your policy. If you didn't have your assets in a trust and the damage to the people on the collapsed desk was severe enough.............. Maybe this could have bankruptcy implications.

And how do these considerations add up in comparison to adding value (Im not a fan of buying a house withour approvals for additions).

I am all for taking calculated risks. However I believe the investment in a private certifier to get it council approved and making any necessary changes would certainly be worthwhile for your long-term investment.

One thing I have learnt is to put another clause on the contract before signing to include any additions must have concil approval before settlement. Most of the people I have spoken to are like me and thought these were included in a conveyancing clause (could be different state by state?).

A new house has to in theory meet council regulations. If it didn't it would not get it's "Certificate of Occupancy". However to my knowledge when buying an existing house there is no such requirement that anything should be council approved. I have purchased houses with non-council approved sheds on them. As I will demolish them they did not factor into the value I put in the contract except to reduce the total price because of the demolition cost.

Buyer beware. Do your due diligence and ask your building inspector on any areas that you think may have dodgey council approvals.

Council approvals are worth money.

Cheers,

Sunstone.

 

[Savanna100]

please be aware that in NSW, you cannot get retrospective planning or building approval. This means that all the things mentioned above, like insurance implications etc, will remain as problems.

In the ACT you can get retrospective approval.

I would only buy something if the unapproved works were very very minor.

Savanna

 

[dynamite]

The place Im looking at has had a double window converted into french doors which lead onto a deck. None of which is council approved, or certified. The council has told me to draw up the plans for the deck myself and it will cost $70 to get approval. They said they dont need to know about the french door conversion. So how important is it to get the french door conversion certified by a builder?

The reason I ask is the builder whom built the deck will certify, draw the plans and get approval for $500.

What to do !

 

[Sunstone]

Dear Dynamite,

Definitely get the deck approved. French doors....... Again probably less so but ask the question to see if you can them both certified together. If it doesn't cost too much more then could be worthwhile.

Cheers,

Sunstone.

 

[frenzy]

Originally posted by dynamite


One thing I have learnt is to put another clause on the contract before signing to include any additions must have concil approval before settlement. Most of the people I have spoken to are like me and thought these were included in a conveyancing clause (could be different state by state?).

in qld you need to do it (just did one last month)not sure about nsw

prob is some thing you should add to all contracts

 

[Sunstone]

Dear guys,

Something to remember:

Extra clauses in a contract can be well and good but there is also a point at which too many clauses bog down the process and scare the seller into not signing the contract.

This potentially increases the chances of being gazumped on a great deal.

Cheers,

Sunstone.