I am currently going through the paperwork associated with a vendor’s statement and found a very interesting paragraph under the heading ‘Building Approval’
When doing your due diligence your inspection discovers ‘works’ that need completion or have not been carried out with the necessary building approvals that you – not the vendor may be responsible for compliance.
Is it just me, but I would have thought that ‘illegal or unfinished works’ would be the responsibilty of the vendor who should be made to comply, face stiff penalties and/or be given an order to remove.
Am I being too harsh but really the vendor should be held accountable.
What do you think?
‘You will never go broke taking a profit’
Hi Pickworth – great to see you posting as I know you have a wealth of knowledge and experience to add to the forum. Geez, you should be teaching this stuff at Uni.
In regards to your query, I think the auction houses have this sort of thing down to a fine art as a vendor with their “as is, where is” terminology. If this prop. was up for auction, that is exactly the basis on which the Purchaser would accept it. Other choice of course is to walk away…depends on the size / cost / impact of the infraction and the likelihood of your gaining the necessary approvals.
Ethically, it seems sort of ‘gut feel’ right that the vendor should be responsible, but I think you’ll find the Purchaser ends up with it in his / her lap.
Love to hear more from you Pickworth.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Dazzling
Thanks for your reply. I agree with what you say – what you see is what you get. However I do believe that it is the responsibility of local council to follow up as many are illegal and do not have permits.
Years ago local councils used aerial photography to monitor such activities.
I have also recently required a permit and had quite a chat about this matter with the building inspector – but he really wasn’t interested. Probably another case of councils being under resourced.
I believe councils should be much more vigilant.
This would also have ramifications for public liability would it not.
‘You will never go broke taking a profit’
Hi Dazzling and Pickworth,
On a recent settlement we took out an insurance with First Title Insurance and I believe it covers risks associated with but not confined to conveyancers checks.
eg “Insure you against actual loss icurred —-etc—the insured is orderedd to demolish, alter, add to or rebuild any building or part thereof on the land,”
PLUS of course many other clauses !! Seemed a good idea at the time.
To me it was a safeguard and I trust I never have to use it.Cheers for now Len
I know buying at auction you are stuck with what you buy, but I would have thought a private sale you could expect them to have permits or reduce price to compensate. I bought a house at auction once only to find out that the stormwater was hooked up to the sewer which was highly illegal but I didnt know. Sold it at auction as………. I’m amazed the council weren’t interested. Most of them can’t wait to enforce their rules to the letter
Fern
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