The old saying of ‘buyer beware’ still rings true when purchasing a house in Queensland. This is especially important when it comes to unapproved alterations or extensions to a property.
When you’re considering buying a house it is important to be aware of where the risks and responsibilities of the purchase process lie at any given time, as they often shift as the process moves forward. Unapproved alterations and extensions to a property are one these shifting responsibilities.
Prior to signing the contract of sale, it is the responsibility of the seller to ensure that any alterations to the property have the required Council approval. If no notice has been issued by the Council in relation to the work, then there is no requirement that the seller comply with the required approvals prior to entering into the contract. Further, the seller is not legally obliged to disclose this material information to a buyer.
Former Queensland Fair Trading Minister Peter Lawlor described the situation as follows:
“While a real estate agent needs to verify the material facts when selling a property and encourage the seller to disclose all information, there is no obligation or legal requirement for the agent or seller to conduct building and pest inspections, or conduct council approval surveys prior to listing a property for sale.”
Once the contract is signed, the responsibility for these approvals shifts to you; the buyer, who is left with having to deal with the unapproved structures.
You may think that you are protected under the pest and building inspection clause and you will be able to terminate the contract on these grounds. This is not the case in Queensland. These inspections are limited to looking at the structural integrity of the house as opposed to whether it has the required Council approvals.
While standard practice in a transaction is to conduct a building and pest inspection as part of the purchase process, an inspection of Council building approvals is not part of the standard process. Regardless, once the contract has been entered into, any unapproved structures become the buyer’s issue if no notice has already been issued. So unless the Council has previously issued a notice to the seller about the alteration, then the seller is under no obligation to make any disclosure to the buyer or to comply with the notice. Hence the term ‘buyer beware’.
So what should you do?
If you have concerns that the property may have been altered or an extension added then it may be worthwhile seeking legal advice prior to signing the contract. Don’t fall into the trap of becoming liable for any future notices in relation to the property. This notice could include a requirement to apply for Council approval, carry out of any rectification works, or potentially to demolish the unapproved alteration to the property.
A lawyer can draft a special condition for the contract, which will make the purchase subject to the outcome of relevant searches; giving you a right of termination should any unapproved alterations or extensions be found.