Should one buy a house which has additions which aren't approved. I found a property which if renovated would have been an excellent investment but for one drawback, there was a bedroom, entrance room and an extra toilet all unapproved structures. The floor of these structures was also below 400mm which meant the pest inspector could not get right under the floor to complete the inspection but he did say from a distance it appeared OK as he had infrared equipment.
I put it on the vendor to gain approval before we exchanged but they refused and they said I would have to after settlement. I decided not to proceed but am wondering if it was the right decision.
Should I invest in properties with unapproved structures and take the chance of getting approval after settlement or should I stay away from them altogether?
As a condition of purchase, I would include a clause for the vendor to get the approval at their expense.
Dear Anny,
This happened to me some years ago that may shed light on your situation. We bought a house with a separate garage. The purchase went smoothly. We enjoyed the garage and used it all the time. About 5 years after buying the house we decided to refinance. During the refinance process we were alerted by the new bank's solicitor to the the fact that the garage was an unapproved structure; and they were not willing to proceed with the refinance unless we either tore it down or got it approved. We tried to get council approval but it was denied. We were not going to tear it down, as it was a great garage. The bank declined to refinance us, but we ended up paying a loan application anyway (thank you Aussie home loans!). It was a very old house and it was obvious the garage had been there for at least 20 years, and the house had been sold many times….I guess even though the unapproved structures are a great addition, the problem is going to be the finance angle. And who needs that?
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