Council Approval on Granny Flats

I am currently looking for an IP in the inner west of sydney, probably the Canterbury or Marrickville council....

A number of properties I come across that seem to have good rental returns are never approved! And the RE agent always say the same "don't worry about the council approval you don't need it.... just rent as is" :rolleyes:

I have attached a good example below I had a good look at and was relativelty cheap (but in hindsight maybe for good reason). They had a 3 bedroom house attached to the back of the house which was not council approved and also the rooms were divided into 1 bedrooms for students. See below link:

http://www.domain.com.au/Property/For-Sale/House/NSW/Marrickville/?adid=2007600632

Now my dilema is with a number of other properties, the granny flats/garages look reasonably built and I am assured they would pass council approval if applied. I do not want to conduct a building and pest inspection on every one but I know roughly if it is ok or dodgy:eek: and the sizes they have to be in relation to the block.

How have people found it if they have purchased an IP with a granny flat on to get council approval? Or have you simply gone ahead and carried on renting as is without ever gaining council approvaL? This is a possibility and the only way you would ever be investigated is if your neighbours complain to the council. Obviously if you are renting the IP to 2 x tennants there is limited control you have and this is therefore a big risk!!

With big risk = reward but do many investors do this and just not tell the council and not sign leases with their tennants?

Or do you then get council approval after the purchase? or a building report?

Or do you just move on to the next?:confused: I seem to have done this a lot over the last few months and just think I may be missing the boat..... especially with the limited supply of IP's atm.

Some feedback from people who have had experience in this area would be greatly appreciated.....

Thanks

Ritchie
 
Argh !!!! As a town planner I always warned people against unapproved work as, its not just the Council you have to worry about, They may be able to give you retrospective approval for the use but you can not get retrospectiove building approval and, trust me, UNAPPROVED WORKS ARE UNINSURABLE !!!

If anything happens you lose the lot and also leave yourself open to actions by your tenants for personal and property damage.

Dont buy or build unapproved work...ever
 
Thanks for the advice, yes it does seem very risky...... But how does everybody else do it?

There would be no landlord insurance, but I understand you can still get public liability insurance and insurance for the house itself - just not the granny flat!.....

These purchases are very tempting by the returns on offer!? But I dont want to leave myself open to potential claims down the track.

Thanks for any opinions.....

R
 
Granny Flat

So been on my rounds today and seen a number of properties.... I came across another house today with a granny flat! The neighbours both have the same on either side....and both without council approval :confused:

So, same again..... More of the same?!

I would at least say this is less rislky as the neighbours are less likely to complain.... And the council approval would be easier down the track... Now, given this is likely to give a good return can I go ahead with it and then get each tennant on leases with council approval once eerything finalised?

Thanks
 
You guys seem a bit too excited, you need to calm down and think carefully.


So been on my rounds today and seen a number of properties.... I came across another house today with a granny flat!
Wow ...another one :rolleyes: sweeeeeeeeeeet.

The neighbours both have the same on either side....
You'd almost think everyone was doing it :rolleyes:

and both without council approval :confused:
How do you know that? :confused:

So, same again..... More of the same?!
I guess :p

I would at least say this is less rislky as the neighbours are less likely to complain....
Yes, I'd agree - less risk

And the council approval would be easier down the track...
You should not assume that council approval will be forthcoming.

Now, given this is likely to give a good return can I go ahead with it and then get each tennant on leases
You or someone else if you don't.

with council approval once eerything finalised?
You should not assume that council approval will be forthcoming.

and, trust me, UNAPPROVED WORKS ARE UNINSURABLE
Might have been at one stage but if you purchase Title Insurance when you are purchasing, then this is one of the things they DO COVER. Plus there are some insurance companies that will do LL insurance for non-approved dwellings.
 
Thank you for mentioning title insurance, I had never heard of it so I did some online research. It's a once only payment and sounds like it could protect you from unapproved work. I will definitely take it out next time I buy so thanks for mentioning it. I will also advice any future applicants that this would be a good idea to look into.

As for future Council approval on illegal work, Council can only retrospectivly approve a "use" not a structure. You cannot get retrospective building approval.
You can however puchase a "Building Certificate" from Council which will allow you to avoid any sort of Council action for 7 years but this will only be granted where the works would have been approvable in the first place.

I cant see any sort of approval forthcoming from Council for unauthorised dual occupancy if constructed in a single residential zone which would not allow dual occs as part of the approved use for that site.
 
Thanks for the feedback Properturnity,and hey how do you always reply with the quotes? It would make things a lot easier because I could refer to the person I was talking to instead of forgetting:confused:

I have also done a bit of research into title insurance as have not heard of it? Is it quite common then and what price (one-off) would you be looking at? Are we therefore saying it would cover you for an unapproved granny flat in the event of a fire in say 5 or 10 years and the tennant suffers damage??

Savanna, I have seen one in the Canterbury council zoned 3(c) so I understand this should not be a problem for a duel oc. Is this in your area or can you let me know what you think? I will try to get to the council one day this/next week as they do not seem too keen to tel you things over te phone - but some of us work Mon - Fri (unfortunatley!!).... Here's to retiring early - let's hope:eek:

Yep Properturniy, understand somebody else will do it if I dont so why not go for it soonr rather than later with the prices going up!!
 
Thanks for the feedback Properturnity,and hey how do you always reply with the quotes? It would make things a lot easier because I could refer to the person I was talking to instead of forgetting:confused:
You hit the "quote" button at the bottom of the post you want to reply to and then do a cut & paste job on the opening and closing quote thingies. :)


I have also done a bit of research into title insurance as have not heard of it? Is it quite common then and what price (one-off) would you be looking at?
A couple of hundred $'s. Ask a solicitor or conveyancer who sells it.

Are we therefore saying it would cover you for an unapproved granny flat in the event of a fire in say 5 or 10 years and the tennant suffers damage??
You'll have to read the PDS before making a purchasing decision.

...I will try to get to the council one day this/next week as they do not seem too keen to tel you things over te phone - but some of us work Mon - Fri (unfortunatley!!)
Awwwh working is so 90's. :p

Yep Properturniy, understand somebody else will do it if I dont so why not go for it soonr rather than later with the prices going up!!
You still have to be comfortable with the risk before making an investment decision.
 
Title Insurance

Hi Ritchie 77

I am also in the process of buying a house with a garage conversion to a granny flat; and yes, my conveyancer did advise me to get title insurance; it costs about $400. He sits on the Council of Conveyancers (or whatever you call it ) and so he should know quite well. (BTW he is very good; if you want to know his services just PM me, ).

For my case, he has checked with the vendors' solicitors and they could not provide evidence of whether it has been approved (it is that old). So the insurance can reimburse you with any losses (equivalent to building a new gf)
if council threatens to pull it down.


Hope this helps
 
....For my case, he has checked with the vendors' solicitors and they could not provide evidence of whether it has been approved (it is that old).

That is often the case. Many councils have archived off their building records that are past 10 years old - and hold them off-site. You can pay several $hundred dollars and ask for a search of the archives to see approval status or otherwise.

However, one question you've got to ask yourself is "if it has been there that long and nobody has complained / no action has been taken by council, what are the chances of that happening now?"

I would have thought that some of these places that have been there that long, probably have "existing use rights" by now. :p (No - this is not advice).
 
Granny flat unathorised

Hiya

Also for my case, apparently Holroyd Council had a big fire which destroyed all their past records and so they definitely do not know whether it is authorised (or unauthorised!) Works to my favour!:)
 
You hit the "quote" button at the bottom of the post you want to reply to and then do a cut & paste job on the opening and closing quote thingies. :)

Thanks Propertunity..... I hope this works:eek:


A couple of hundred $'s. Ask a solicitor or conveyancer who sells it.

Post below confirms which is good and cheap-ish.....

You'll have to read the PDS before making a purchasing decision.

Awwwh working is so 90's. :p

You still have to be comfortable with the risk before making an investment decision.

Yes I will, thanks again for the advice/input!
 
Well that didnt work but i WILL try again soon!!!

I am not too concerned about the risk of tenants and LL insurance, that is a risk I am prepared to take...... IT was just the council approval and what happens if there is a fire/accident..... The title insurance seems a reasonable fee which will hopefully cover you in this event.....

I will conduct a bit more DD and let you know if and when I do make a purchase if it is a multi dwelling or g/flat......

Jeez - wish I didn't work then maybe I could do all this research and find out the extra information!!
 
Hi Ritchie77
3(c) zoning is a commercial zoning which may or may not include residential uses. You need to look at the Canterbury Local Environmental Plan (google it) to see what is permitted or prohibited under 3 (c) in this Local govt area.

I'm a NSW planner but have not worked in Canterbury, I would have to look up the LEP before I could advise you so its probably just as easy to look it up when you have a chance.
 
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