All Topics / Legal & Accounting / The liability of an illegal kitchen. Whose responsibility?

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  • Profile photo of RowesterRowester
    Member
    @rowester
    Join Date: 2006
    Post Count: 19

    Hi,

    A colleague at work is selling their 5 bedroom house. It has a second living area on the lower level which has a 2nd kitchen, which hasn't gone through council.

    A property investor is looking at purchasing the house, and leasing both levels to seperate tenants, turning a $1 mill house into a positively geared one.

    The issue is this: As the 2nd kitchen is illegal (which the potential purchaser already knows), if something were to happen to the tenant, and they sued the new owner, is there any recourse on the previous owner (who installed the kitchen illegally)?

    Or does the buck stop with the new owner, who did their due diligence prior to purchasing?

    Should something be written into the contract which stipulates that the purchaser is aware of the kitchen being illegal?

    Any assistance will be greatly appreciated.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    This question is perfect for Terryw! I'm sure he'll be along to answer it soon.

    I'm no legal expert but I would have thought if the unapproved structure was brought to the attention of the buyer then the onus would be placed on the buyer after settlement.

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,856

    you buy it warts & all. If it is not shown on the water board plans, it’s illegal. If the buyer does not exclude it or place a requisition on the contract about providing certification or a price reduction to remove illegal works, then it’s the buyer’s problem.

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