Building/Council approval woes – to buy or not??

Hi All

I’m hoping for some advice regarding purchasing an investment property which has some renovations but council approval has not been sought. The work undertaken is basically changing the garage areas below the house into a kitchen and living space including a media room.

I have also been made aware that a previous building inspection has picked up that one part of the living area is 3cm short of 2.4m which is below the correct classification for a living area. This will be classed as storage but it is a very minimal area which could be rectified by a plasterer I believe.

The work has been completed by a licensed builder etc and the work appears to be of a high standard and some plans/drawings have been supplied (though not exact) but I have serious concerns regarding insurance (liable) risks to tenants in the event of a fire.
I have carried out my own research and insurance companies are saying these areas will not be insured in the event of a fire or tenant being harmed in anyway.

To be honest I have lost out on a few houses now due to putting clauses in the offer (subject to building approval) but I seem to be getting the usual spiel from real estate agents saying that most houses have had renovations without approval but people are just buying.

I’m aware that I can have a building certifier try and get the build approved but it’s becoming annoying why so many are not getting approval before the build.

The majority of the time we are being put into multi buyer situations and obviously losing out as we are inserting this into the clause. I suppose I really should walk away from these houses but it appears there are so many!

It has been suggested that I could have the so called areas which have not been approved wrote into the tenancy agreement (uninsured) but this would seriously rule out many tenants from being attracted to rent the property.

I know I’m basically answering my own questions but just interested if others are finding this an issue or just taking the risk that a horrible event will not happen.

Thanks in advance