KEY TAKE OUTS:
- While properties with unapproved structures can offer some great benefits, including lower purchase price, potential for value addition and unique character, they also pose legal risks, financial challenges and insurance complications.
- If a property you’re purchasing has unapproved structures, consult with an expert, like the licensed conveyancers at Coutts, to ensure you mitigate the risk
- There are important steps to take prior to purchase and post purchase that new homeowners must be aware of.
Purchasing a property with unapproved structures can be both an exciting opportunity and a potential minefield. Whether you’re considering a charming fixer-upper or a sprawling estate with additions that lack official permits, understanding the implications is crucial. In this blog, we’ll explore what to consider when buying such properties and how to navigate the complexities involved.
UNDERSTANDING UNAPPROVED STRUCTURES
Unapproved structures refer to any additions, modifications, or entire buildings on a property that lack the necessary permits or approvals from local authorities. These can range from simple decks and sheds to significant renovations or even entire rooms that were built without adherence to local building codes.
PRO’S AND CON’S OF PURCHASING PROPERTIES WITH UNAPPROVED STRUCTURES
Pros
- Lower Purchase Price: Properties with unapproved structures often sell for less, presenting an opportunity for buyers to negotiate a better deal.
- Potential for Value Addition: With proper approvals, the existing structures can increase the property’s overall value and utility.
- Unique Character: Unapproved structures might offer unique design features that enhance the property’s charm and liveability.
Cons
- Legal Risks: Purchasing a property with unapproved structures can lead to legal issues, including fines or mandatory removal of structures.
- Financing Challenges: Lenders may be hesitant to finance properties with unapproved structures, complicating your purchasing options.
- Insurance Complications: Securing homeowners insurance can be more difficult, and some companies may refuse coverage altogether.
KEY CONSIDERATIONS BEFORE PURCHASING PROPERTIES WITH UNAPPROVED STRUCTURES
1. Conduct Thorough Due Diligence
Before making an offer, conduct extensive research on the property:
- Property Records: Check local government databases for permits and inspections. Understand what has been approved and what hasn’t.
- Past Violations: Investigate any past violations related to the property that may impact your decision.
2. Consult with Experts
Engaging professionals can save you time and money:
- Licensed Conveyancer: A Licensed Conveyancer can provide valuable insights into legal implications and help you understand your rights and obligations.
- Real Estate Agent: Work with an agent experienced in properties with unapproved structures to navigate potential pitfalls.
- Contractor/Inspector: A qualified inspector can assess the condition of unapproved structures and estimate the costs involved in bringing them up to code.
3. Assess Local Regulations
Understanding local building codes and regulations is essential:
- Zoning Laws: Check how zoning laws might affect the property and whether unapproved structures could be a problem.
- Permitting Process: Familiarize yourself with the local permitting process to know what steps you’ll need to take.
STEPS TO TAKE AFTER PURCHASING PROPERTIES WITH UNAPPROVED STRUCTURES:
1. Regularize the Structures
Once you’ve purchased the property, prioritize regularizing unapproved structures:
- Apply for Permits: Start the permitting process as soon as possible. This might involve submitting plans and paying fees.
- Inspections: Be prepared for inspections and possibly modifying the structures to meet code requirements.
2. Budget for Potential Costs
Factor in costs for:
- Permitting Fees: Costs associated with obtaining permits and completing any required modifications.
- Legal Fees: Possible costs for legal assistance during the regularization process.
- Repairs and Upgrades: Expenses for making any necessary repairs or adjustments to meet building codes.
3. Keep Documentation
Maintain thorough documentation of all processes, permits, and communications with local authorities to protect yourself in case of future disputes.
CONCLUSION:
Purchasing a property with unapproved structures can be a rewarding yet challenging venture. By understanding the risks, conducting thorough due diligence, and engaging with professionals, you can navigate the complexities involved and turn potential pitfalls into opportunities for growth and investment. With the right approach, you can transform a unique property into a compliant and valuable asset that meets your needs and vision for the future. Happy house hunting!
ABOUT CHRISTINE BASSETT:
Christine is a Licensed Conveyancer and Justice of the Peace at Coutts’ Narellan office. Since joining Coutts Lawyers & Conveyancers in 2013, Christine quickly immersed her interest in the property and has since completed studies of Conveyancing Law and Practice at Macquarie University; and is accredited with the Australian Institute of Conveyancers NSW.
For further information please don’t hesitate to contact:
Christine Bassett
Licensed Conveyancer & JP
info@couttslegal.com.au
1300 268 887
Contact Coutts today.
This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.
