Just recently while doing my due diligence to purchase a property in the $550k range I was close to making my best and final offer but needed to complete all of my due diligence.
The property in question backs onto a water channel/creek in an SA suburb which shall remain nameless. My research showed that some properties in this area may be affected by commencement of proposed flood mitigation works specifically channel upgrades designed to increase the water carrying capacity for the entire stormwater system.
My conversation with a Project Engineer at the relevant Council revealed that there is a possibility (though not a certainty) that properties that back onto this water channel could be compulsorily acquired by the State Government to implement the proposed Stormwater Management Plan (a $150m+ project).
I paraphrase comments from the council:
When the Storm Water Management Project goes ahead, enlarging the water capacity is crucial to the success of the entire project.
It's possible the State Government could invoke their powers to compulsorily acquire properties on both sides of the channel in that section not just part of the properties but the properties in total (which from an engineering point of view is the best and easiest decision for excavator access, but obviously would be extremely difficult for residents).
Owners would receive market value + a percentage for relocation costs etc, but in real terms in this kind of situation owners may lose out as the amount offered by the government is often much less than the improved market value for the property. Possible timeframe for the project commencement could be anywhere from 2 years to 10 years from now.
I informed the agent in writing of my decision and my reasons for not going ahead with the offer.
So my question is: The real estate agent did not reveal any of this information to me. Does the agent have a duty to disclose such information to me upfront as well as ALL prospective purchasers?
It was definitely a deal breaker for me - I didnt want to purchase a property that is at risk of being compulsorily acquired in 2, 5 or even 10 years. However, had I not conducted my own extensive research I could well have purchased the property. I really liked the place (PPOR) and was very close to purchasing and was going to put in an offer well above the desired price range. I think I dodged a bullet on that one...
Thoughts about this? Comments?
cheers
The property in question backs onto a water channel/creek in an SA suburb which shall remain nameless. My research showed that some properties in this area may be affected by commencement of proposed flood mitigation works specifically channel upgrades designed to increase the water carrying capacity for the entire stormwater system.
My conversation with a Project Engineer at the relevant Council revealed that there is a possibility (though not a certainty) that properties that back onto this water channel could be compulsorily acquired by the State Government to implement the proposed Stormwater Management Plan (a $150m+ project).
I paraphrase comments from the council:
When the Storm Water Management Project goes ahead, enlarging the water capacity is crucial to the success of the entire project.
It's possible the State Government could invoke their powers to compulsorily acquire properties on both sides of the channel in that section not just part of the properties but the properties in total (which from an engineering point of view is the best and easiest decision for excavator access, but obviously would be extremely difficult for residents).
Owners would receive market value + a percentage for relocation costs etc, but in real terms in this kind of situation owners may lose out as the amount offered by the government is often much less than the improved market value for the property. Possible timeframe for the project commencement could be anywhere from 2 years to 10 years from now.
I informed the agent in writing of my decision and my reasons for not going ahead with the offer.
So my question is: The real estate agent did not reveal any of this information to me. Does the agent have a duty to disclose such information to me upfront as well as ALL prospective purchasers?
It was definitely a deal breaker for me - I didnt want to purchase a property that is at risk of being compulsorily acquired in 2, 5 or even 10 years. However, had I not conducted my own extensive research I could well have purchased the property. I really liked the place (PPOR) and was very close to purchasing and was going to put in an offer well above the desired price range. I think I dodged a bullet on that one...
Thoughts about this? Comments?
cheers
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