Construction work - unapproved by council

[Futurist]

G'day,

I've found a property that has a custom built entertainment area in the backyard - bbq area, pergola, inground fish pond. This development was NOT council approved and has been constructed 10yrs ago.

If I wish to proceed with purchasing this property, what kind of things should I do to safe guard myself from any council fines, or worse-case the council forces removal of the entire entertainment area constructed.?

Because all the work was done by the vendor themselves - how does this affect:
a. Tax
b. Depreciation Schedule
c. Other implications ?

From memory, I read in another post that work done by non-certified tradies, or work done by certified tradies without proper receipts or proof of their certification in that trade etc would have a negative impact on [a] and above somehow?

If i want to make an offer to the seller, what are the things I should do now to prevent the issues above getting worse down the track once the property is mine ?

 

[Peter_Tersteeg]

I could be wrong and some councils may have alternate rules, but I don't think anything you've described requires a council approval in most cases.

A depreciation schedule will put a price on these things and set out what tax benefits are still available to you. You simply hand this document to your accountant and they use it to work out your tax position from here on.

 

[Futurist]

Hi PT_Bear,

The reason I mentioned Depreciation schedules was I remember reading something about capital work deductions (or something along those terms) that said an item was not claimable if it was done by yourself, or if you cannot prove it was done by a certified tradesman.

Sorry I could be mistaken on this topic - but want to confirm if it was true to some extent. Especially since the constructions listed were done by the vendor themselves instead of employing a 3rd party tradesman.

 

[Propertunity]

The reason I mentioned Depreciation schedules was I remember reading something about capital work deductions (or something along those terms) that said an item was not claimable if it was done by yourself, or if you cannot prove it was done by a certified tradesman.

No, you just cannot make a claim for your own labour. This is what you are getting confused with.

In relation to the unapproved works:
1. They may not need approval if they come under 'exempt development'.
2. If you are concerned (and I would not be after a period of 10 years has passed), then buy Title Insurance which covers you for this eventuality coming to pass.

 

[Futurist]

Hi Propertunity,

Awesome if all the construction work was exempt from needing council approval Will check this out to see if this is the case.

However, if they are NOT exempt - what would the council likely do if the vendor goes to them saying 'hey guess what, i built all this 10yrs ago myself and forgot to get approval. My bad.. Can you please approval it now?'

1. Would they incur a fine for not having asked the council before construction began ?

2. If the council inspects the completed work and says yep all good!
Does the council hand out some formal 'certificate of approval' or something for the vendor to keep? Or it is something that is simply logged in the council's system for approved construction work, or just a mere verbal 'ok' ?

I guess I'm asking this is what if I negotiated for the vendor to get council approval, is there a 'certificate' or some sort the vendor can show the purchaser to prove its all good with the council ?

Sorry, I'm just not knowledgeable enough on council approval procedures just yet - especially relating to development and construction work I'm afraid..

 

[LisaParker]

Hi Futurist,

Yes, what you suggested Is accurate according to a friend of mine who works for the council, did unapproved works then got scared and wondered what would happen if they got caught.

Their inquiries led her to discover the following,

Council wouldn't know unless someone made a formal inquiry
Council would come out to see the works
They would issue a specific letter (can't recall name) telling them to remove the work or make sure it complied to councils planning scheme and building regs, once it complied they would provide owner with a certificate of compliance.
If they did not fix or remove, then fines could be applied.

That was a council in VIC, you should ring the council anonymously and ask, they will give you a lot of answers and not pry. Most of them do not really care and can only work within their scope of job description, so people rarely take it further from what I am told by my council contacts.

Just call the council then you can make an informed decision.

On some things I think if it's not broke don't fix it, if its major work, typically I won't take it on.

Regards lisa

 

[Futurist]

Did alot of research over the wkend on this topic.

a. The seller knows they did all this construction work without council approval.
b. The seller put in a special condition in the contract stating
-- 1. the vendor does not have a building certificate from the council on the work done.
-- 2. the purchaser cannot make claims or rescind if the purchaser is fined by the council, or told by the council to demolish the construction work.

As PropertyUnity mentioned, all the work done is part of the "Exempt Development" list.
However that list has alot of 'conditions' like size, height, material used, how far it is from the wall etc. From what I saw during my inspection, they all looked ok. However if we dive into the specifics of dimensions and height and how far it is from the neighbours wall etc - then I am not 100% convinced it meets the criteria for exempt development.

Also as PropertyUnity mentioned, a Titles Insurance would protect the purchaser incase the council is made aware of the unapproved works. Insurance also covers building certificate, demolition etc. if things get bad real quick after the sale.

Anyone can apply for a Buildings Certificate. Which is the councils approval that the work is good and checked. The council will send over an inspector and check all the work done. However, I have read that each application for a Building Certificate must come with a 'Surveyors Report' which I dont think the owner has -- as they built it themselves.. So will be out of pocket costs to get the surveyors report done, in order to apply for a Buildings Cert in the first place - however it still does not guarantee the work done is compliant with council rules - which could mean further costs to alter the work done, or worst have all the goodness demolished..

Sounds very risky for a purchaser to buy a property that could have all renovations made to it, demolished by demand from the council..

Question: How much would it be to get a Surveyor's Report ?

 

[BMan]

dob them in to council so they have to get it fixed up before they sell

 

[fernfurn]

I heard on the grapevine from someone who did it deliverately that if it is there for 7 years then the council cant do anything

 

[Propertunity]

I heard on the grapevine from someone who did it deliverately that if it is there for 7 years then the council cant do anything

The grapvine speaketh with a forked tongue........not true.

 

[Ideo]

I heard on the grapevine from someone who did it deliverately that if it is there for 7 years then the council cant do anything

Not true.

A building certifcate applied for in retrospect, where approved, applies for 7 years

 

[Futurist]

Not true.

A building certifcate applied for in retrospect, where approved, applies for 7 years

Yea, not true at all. Spoke to the council it doesnt matter when it was built, 3, or 30yrs ago - if its work that is unapproved, the council can enforce modifications to meet criteria, or demolishment of the work.
--
It was weird though, had a discussion with friends at work.

Where is the line drawn ? -

Say for a house that added a 'carport' that was never approved by the council. A buyer during an inspection wouldnt think twice that a 'carport' was a construction work done by the seller 30yrs ago. And wouldnt thinkg to ask for any building certiificates etc.

They settle, then later down the track council finds out and see the carport too close to the lot boundary... Asks for changes to be made to the 'carport'.... How are buyers suppose to know what has been 'added' to the property that was not originally there over XX years and wont need a building certificate from the council ?

Things can be as common as a shed, walkway, pergola etc etc..

 

[matto_]

friend of mine was in similar situation recently. The house he was looking at buying was built without appropriate certificates etc. He ended up not going ahead with the purchase.

 

[Melbournian]

Well - i'll be one who just sold a property where my parents decided to put a deck up without a permit.

As it was only 3-4 years ago - i would have required a building permit. Sold it at auction and then the buyer through his solicitor asked for a building permit or compensation. Genuine buyer though. i countered with a appliances, sofa and 2K of cash and they accepted luckily. The permit according to my buliding surveyor would have cost ard 6-7K and taken a lot of my time.

i'm in the process of taking the handyman to court who took charge of the work and wrongly gave advice to my parents. Anyway - will see how it goes.

I think if you are looking to buy something that has construction that doesn't require a permit - just check with the council or buidling surveyor on a quote to obtain the permit with the necessary costs to get it certified. i would say your offer may not be accepted but you could do it even after your offer is accepted as a home that is structually not sound home could leave the offer made void similar to mycase.

As my solictor advised me -eventhough if i had sold the property and something were to occur say a kid fell off the deck - the negligence liablity would have beend passed on to me which is why i coughed up the cash and appliances to get myself out of it.

 

[wylie]

Well - i'll be one who just sold a property where my parents decided to put a deck up without a permit.

As it was only 3-4 years ago - i would have required a building permit. Sold it at auction and then the buyer through his solicitor asked for a building permit or compensation. Genuine buyer though. i countered with a appliances, sofa and 2K of cash and they accepted luckily. The permit according to my buliding surveyor would have cost ard 6-7K and taken a lot of my time.

i'm in the process of taking the handyman to court who took charge of the work and wrongly gave advice to my parents. Anyway - will see how it goes.

I think if you are looking to buy something that has construction that doesn't require a permit - just check with the council or buidling surveyor on a quote to obtain the permit with the necessary costs to get it certified. i would say your offer may not be accepted but you could do it even after your offer is accepted as a home that is structually not sound home could leave the offer made void similar to mycase.

As my solictor advised me -eventhough if i had sold the property and something were to occur say a kid fell off the deck - the negligence liablity would have beend passed on to me which is why i coughed up the cash and appliances to get myself out of it.

Are you saying that you are taking the handyman who built your parents' deck without getting approval to court? (And if so, why can you do that? Wouldn't that have to come from your parents?) What are you wanting to happen at court? Are you wanting him to pay for retrospective approval for the work he did? And are you saying in the last paragraph that without approval, you can be held liable for (your example) a child falling off the unapproved deck?

If so, then how can you ever remove that risk of liability? You (or your parents) no longer own the house, so could not get retrospective approval for the unapproved deck. You (or they) cannot force the new owners to ask for retrospective approval, so does that mean you are liable for ever for anything that happens on that unapproved deck? How scary

Or am I reading your post incorrectly?

 

[Melbournian]

Are you saying that you are taking the handyman who built your parents' deck without getting approval to court? (And if so, why can you do that? Wouldn't that have to come from your parents?) What are you wanting to happen at court? Are you wanting him to pay for retrospective approval for the work he did? And are you saying in the last paragraph that without approval, you can be held liable for (your example) a child falling off the unapproved deck?

If so, then how can you ever remove that risk of liability? You (or your parents) no longer own the house, so could not get retrospective approval for the unapproved deck. You (or they) cannot force the new owners to ask for retrospective approval, so does that mean you are liable for ever for anything that happens on that unapproved deck? How scary

Or am I reading your post incorrectly?

In regards to your comments - i am currently looking into it as to whether it would be the tribunal etc or further action as i am looking into damages. i was advised by my parents that he went ahead to do the work and advised that the work did not require a premit. i confirmed this with him in person and he also admitted it himself. He also published himself as a registered builder but was not one. THrow in the home warranty etc etc. But obviously i need to advise him of my intentions and work my way through it. As my parents are non-residents of the country they do not understand the various processes and risks of building without a building permit.

As to the risk of liabllity - yes that was put advised by my solicitor - so just relaying what was told.

 

[wylie]

Wow, that is scary (about the liability for anything that may happen in the future due to the works carried out without approval).

I think I would check it out further. Makes me wonder how many houses out there have work done without having had approval, and how often this "chasing up" of the previous owner to sue them would actually happen?

 

[Melbournian]

Wow, that is scary (about the liability for anything that may happen in the future due to the works carried out without approval).

I think I would check it out further. Makes me wonder how many houses out there have work done without having had approval, and how often this "chasing up" of the previous owner to sue them would actually happen?

well - i had a hard buyer put it that way - they went to council to ask about it.

majority of works ppl do don't require permits like painting, tiling, putting in new kitchen, floors as they're more cosmetic stuff. things like constructing a deck which was like 1.8 meter above the ground and had a rooftop required one unfortunately. Also after a certain amount of time say 10 years - things like that would not be applicable etc.