property not what they said.

D

denboy

Hello.
I bought a newly built property in Brisbane approx 1 year ago that was advertised and sold as a dual income dual living property. Basically a 3 bedroom single level house with a double garage on one end and a 2 bedroom unit on top of the garage. both are completely independent of each other. for the last year it has been leased out to 2 separate groups by 2 different agents. I recently received a letter from the council saying that it does not meet town planning rules and that there can only be one lease on the whole property.
At first the builder was adamant that it is all ok and the council was wrong, he had a legal letter drawn up and sent to the council but he is now saying that I will have to only have one lease at the next lease renewal date.The main selling point and my main reason for purchasing the property are about to disappear.I believe there are approx 50 properties in the area that are all exactly the same and are all getting the same deal from the council. my question is, what recourse do I have as the property is not what it was said to be. I would never have been interested in it if it wasn't what they said it was.
the council say that the builder knew all along about the issue but thought he had found a loophole to get around it.
thanks for any help/advice.
 
this is likely to be one of those, he said, she said, ......not looking good.

If you have something in writing that the dual income was council approved as separate lets, then you would have some legal recourse im sure.

The challenge I see is that the reocurse is to a $ 2 company most likely, especially if there are larger numbers of punters involved.

Speak with the conveyancing solicitor for a start Id say

ta
rolf
 
is there a way you can address councils concerns to make it into the dual income producing asset you thought you bought?
 
denboy said:
Hello.
I bought a newly built property in Brisbane approx 1 year ago that was advertised and sold as a dual income dual living property. Basically a 3 bedroom single level house with a double garage on one end and a 2 bedroom unit on top of the garage. both are completely independent of each other. for the last year it has been leased out to 2 separate groups by 2 different agents. I recently received a letter from the council saying that it does not meet town planning rules and that there can only be one lease on the whole property.
At first the builder was adamant that it is all ok and the council was wrong, he had a legal letter drawn up and sent to the council but he is now saying that I will have to only have one lease at the next lease renewal date.The main selling point and my main reason for purchasing the property are about to disappear.I believe there are approx 50 properties in the area that are all exactly the same and are all getting the same deal from the council. my question is, what recourse do I have as the property is not what it was said to be. I would never have been interested in it if it wasn't what they said it was.
the council say that the builder knew all along about the issue but thought he had found a loophole to get around it.
thanks for any help/advice.
Click to expand...
This issue has been going on for some time and certain builders have been actively promoting the higher yield to investors, apparently they have been getting certification in cases but they were always working a grey area, not surprised some issues are presenting now, Definitely time for quality legal advice.
 
If it was being leased as dual income when you bought it, but before council officially informed the vendor and RE that it was not appoved then it probably wasn't false advertising, even though it did not comply.

Check out when the council issued the order to cease dual occ. and to who, and whether before the sold date or not. If before then you may have a case??

You'd need to prove who had this info; both vendor and RE or just vendor.

Just me thinking here. I do know when it comes to granny flats, here in SA anyway, you need to take extra care with your DD with some councils - I know one council really dislikes them and will 'try' to shut the LL down, even when they do comply.
 
How many power and water meters does it have?
How many sets of rates do you pay?
Are the two dwellings firewall rated?

After trying to claim damages from the builder, talk to council about what is required to legally run two leases. There may be a way. After all, Brisbane is supposed to be going higher density living, as per the new draft town plan.

edit
Keep in mind the council would have approved the construction, and realized it is very difficult to get a 3 br house and 2 br unit under one lease. Ask them if they are aware of similar properties under one lease currently.

Ultimately, I believe they are just out to score a 2nd set of rates from you.
 
Last edited:
hello and thanks for the info.
I am waiting to hear back from testhe conveyancing solicitor (tomorrow)
I bought it brand new through the investors club as I reckoned they would have researched it.
it does have separate meters and we have been paying double rates on it. The council say that this makes no difference.
I do not know any way to get 2 incomes on it other than co tenants (don't like)
or rent out with sublet which I do not like either.
I do not want to lose control of it.
how can it be sold as something tha t it is not?
this must be illegal?
it was sold to us a dual income property stating that "you will receive 2 incomes from this property"
I have also had it suggested that I should put a stair In connecting them and lease it as a 5 bed with 2 kitchens.
 
denboy said:
hello and thanks for the info.
I am waiting to hear back from testhe conveyancing solicitor (tomorrow)
I bought it brand new through the investors club as I reckoned they would have researched it.
it does have separate meters and we have been paying double rates on it. The council say that this makes no difference.
I do not know any way to get 2 incomes on it other than co tenants (don't like)
or rent out with sublet which I do not like either.
I do not want to lose control of it.
how can it be sold as something tha t it is not?
this must be illegal?
it was sold to us a dual income property stating that "you will receive 2 incomes from this property"
I have also had it suggested that I should put a stair In connecting them and lease it as a 5 bed with 2 kitchens.
Click to expand...


I know the person who in similar circumstances set up the trust, which was the main tenant and sublet the both units out to the separate tenants
 
denboy said:
I am waiting to hear back from testhe conveyancing solicitor (tomorrow)
I bought it brand new through the investors club as I reckoned they would have researched it.
Click to expand...

Was the solicitor recommended by the investors club? If so, I suggest you seek opinion from an independent solicitor.
 
the rates are category 4
the solicitor said thateverthing was fine and that wd did not ask for any extra searches of for the dual income to be specifically looked at.
he did say that if we had promotional material etc saying that it would be dual income we should have a case.
how did your friend set up a trust to sublet them both out? very interested in this.
 
You might be able to sue both the solicitor and the club for false and misleading conduct under the old Trade Practices Act. But, are you willing to put up the money and take the risk? What if you lose?

How much is the rent going to drop by?
 
denboy said:
the rates are category 4
the solicitor said thateverthing was fine and that wd did not ask for any extra searches of for the dual income to be specifically looked at.
he did say that if we had promotional material etc saying that it would be dual income we should have a case.
how did your friend set up a trust to sublet them both out? very interested in this.
Click to expand...

If I remember correctly he set up just the normal discretionary (family) trust and the trust entered with the normal residential lease agreement with him. The lease agreement allowed subleasing. The trust subleased the two parts of the property to the different tenants with the same terms than the normal lease agreement.

There are a lot threats in the forum how to set up a trust. I am sure that Terry w can help you.
Also I am not sure if you need a trust at all. You could rent it to someone (e.g. spouse) who sublets the property. My friend could not do that because both he and his wife were on the title and you really can not rent from yourself. Also he did not want to bother his relatives or friends with this either. So the trust was his option.
 
Last edited:
I have heard if a master lease for the property with sub leases set up. I'm not sure if the circumstances or legalities though.

There may have been a trust but that would have been just incidental. The same setup would have been applicable for a property owned by an individual.
 
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