Often we see buyers enter into contracts to purchase property and later discover the lack of council approval for the building and/or any improvement done on the property. What does this mean for the buyer?
Buying a property with any improvements which have not been approved by the local council can be a costly mistake.
What are improvements?
Improvements mean any structures, extensions, additions, alterations or installation works that are done on a property or an existing dwelling. Examples include the house itself, patios, decks, pergolas, garage, pool etc. Before any building works can commence, a plan specifying the details of the proposed work must be submitted to the local council for approval. Proposed building work plans can also be submitted to a private building certifier for approval. If the works are substantial (or outside the scope of a private certifier), a development approval will be required from the council.
Once approval is granted, the work can then commence. When the work is complete, the council should be notified or private certifier engaged to ensure the works have been completed in accordance to the approval, and for final inspection certificates to be issued.
Does it matter from the buyers’ perspective?
It certainly does. Standard Condition 7.6 of the Real Estate Institute Queensland (“REIQ“) Residential House and Land Contract (“REIQ Contract“) states that any valid notice or order by any competent authority (such as local council) must be fully complied with:
- if issued before the contract date, by the seller, or
- if issued on or after the contract date, by the buyer.
In other words, the buyer assumes liability for any unapproved alterations or improvements to the house discovered after a contract is signed. Such liability may include the cost of engaging a certifier, obtaining council approval or even demolition of the structures if they cannot be rectified to comply with the council’s regulations. This can be a costly exercise.
But my building/pest inspector did not specifically mention the structures or alterations to be an issue?
Building and pest inspectors check the physical details, soundness and any damage on the property including any improvements. Building and pest inspectors are not necessarily qualified to advise whether those alterations have received council approval and would usually recommend the council to be consulted for further enquiry.
Can the buyer terminate contract if an unapproved improvement is found?
Unfortunately no. The Standard REIQ Contract in Queensland does not contain any provision which allows buyers to terminate if any unapproved structures are found after the contract is signed.
How can buyers protect themselves?
Consult a lawyer before you sign any contract. Since the Standard REIQ Contract provides no recourse or a way out, we recommend a special condition to be inserted into the contract. This special condition will allow the buyer the opportunity to make enquiries with the council to check for any unapproved structures or alterations, and if one is found, the buyer may have the option to terminate the contract or to negotiate further.
How we can help
Quinn & Scattini Lawyers are highly experienced with all types of property matters. We can assist buyers with any pre-contractual advice and negotiation including drafting special conditions to be inserted in the contract. Do not sign a contract until you have sought legal advice.
Why choose us?
You will be talking to a real expert, local to you. You will not be treated like another file number, but as a real person, and a person going through a difficult and stressful experience. Get expert advice, not just what you want to hear, in a language you can understand, not legal jargon.
Q&S’s expert property lawyers are available at any of Q&S’s seven office locations.
Still need answers?
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