Vendors built illegal structure... make them pay?

Long time Somersoft forum stalker, just registered for my first post!

I bought a property in Melbourne in January 2013, and in February received a Building Notice from the council stating that the pergola was built illegally without a permit, and I have to go through all the red tape (Building Surveyor, Drawings, Plumbing Compliance, etc.) to make it compliant, or have it demolished by mid-August. I have already spent $2000 on this and it looks like I'm up for another $1500 at least.

I have it in writing from the previous owners that they had it built in 2008, and they didn't know it needed a permit. They say they don't have the builder's contact details, receipt or anything, so as far as I'm concerned they built it themselves.

I am also aware that the previous owners received a letter from the council advising that an investigation was underway about the pergola while our offer on the property was still conditional, and that an inspection also took place during the conditional offer period. I have it in writing from them to the council that they informed their conveyancer and their real estate agent of this during the conditional offer period, however no one informed us. Obviously if we knew that the council had a pending investigation about a structure on the property during the conditional offer period, our negotiations would have taken a much different course, and we may have withdrawn from the purchase. We were issued with a section 32 for the property before they found out the investigation was underway, but since the offer was still conditional, shouldn't this have been added to the section 32 immediately, as the section 32 is a document which factors into our purchase throughout the conditional offer period??

I would like to recover costs and I would welcome the thoughts of anyone reading this on the following:

Hold the previous owners responsible for illegally building the structure. There is a section in the Building Notice which states:

"Section 137C of the Building Act 1993 and section 8 of the Domestic Building Contracts Act 1995 provide for implied "warranties" for work carried out by an owner builder or builder which relate to the sale of a home.

These sections provide that the vendor or builder "warrants" that [all] domestic building work was carried out in accordance with laws and legal requirements including the [Building] Act and regulations", and that, any person who is a successor in title to the purchaser may take proceedings for a breach of the warranties as if that person were a party to the contract.

So, if illegal building work was carried out without the required building permit or in breach of the Act or regulations, proceedings for a breach of the regulations may proceed against the builder owner or builder who originally carried out the building work."


My intention is to write a letter to the previous owners (I have their new address and phone number), stating that as they cannot provide the details of the builder, it is understood they built the structure themselves and hence are the owner builders. They are therefore personally responsible for a breach of the building acts. In the letter I would like to itemise all costs and attach receipts, requesting a bank transfer for the full amount within 1 month. The ultimatum would be that if they do not comply, I have a legal practitioner ready to take the matter to the Magistrate's court, in which case they will also be required to reimburse my legal fees.

I am not sure if it is worth also stating that they failed to disclose that an investigation on the structure was underway when our offer was still conditional. No one so far has been able to tell me whether they were legally obligated to provide me this information during this period. If not the vendors, perhaps the agent or conveyancer were obligated to disclose, since they were made aware also?

I have also considered bringing action against my conveyancer, who has been of extremely little assistance after the Building Notice was issued. During the purchase I brought the structure to her attention as a concern, she told me to contact the council to see what had permits on the property, I did so and told her the pergola didn't have a permit, and she basically told me verbally "it's hard to say whether it needs one". In retrospect all she needed to do was check the council regulations and say "any pergola over 2m x 2m needs a permit, you have told me it is larger than that, so it was built illegally and this should factor into your negotiations". Is that reasonable to expect from the services of a conveyancer?

Thanks so much if you have read all this and can provide any advice, I would love to get a lawyer onto it right now, but with all the costs so far I think a lawyer on top of it would send me bankrupt at the moment. I would still get one though if I get a sense that I have a good case and the previous owners don't comply with my first letter.
 
Welcome to the forum :).

I bought a property in Melbourne in January 2013, and in February received a Building Notice from the council stating that the pergola was built illegally without a permit, and I have to go through all the red tape (Building Surveyor, Drawings, Plumbing Compliance, etc.) to make it compliant, or have it demolished by mid-August. I have already spent $2000 on this and it looks like I'm up for another $1500 at least.

Is the $2K spent so far money spent on surveyor, drawings etc, in which case you are on the way to getting approval of the structure?Assuming this is the case, will another $1500 or so give you an approval?

I cannot answer anything legal because I haven't a clue, but my thought when reading all this is whether you just cut your losses, pay the other $1500 and have an approved structure?

Would you really have pulled out of the contract rather than pay $4K extra to have it signed off and legal?

I'm going through a legal challenge right now, and if $4K would solve the problem, I'd pay it in a heartbeat. Perhaps it is the frame of mind I'm in that I think paying $4K to solve a problem is cheap ;).

I understand you want someone to "pay" for perhaps being duped or pushed into settling when, had you had a solicitor rather than a conveyancer, this may have been solved before or at settlement, but is it worth the angst?
 
Thanks wylie. Yes another $2000 or so and the whole matter will likely be approved and over. Perhaps I just have a particularly vengeful personality type, but if I can get the vendors to pay for it, then I would like to. Unfortunately $4k is a lot of money to me at the moment (I wish that weren't the case!), and means my wife's studies have to be deferred for a year, costing us much more in lost income.

And if I can demonstrate they've breached contract or the Building Acts somewhere along the line, why not bring them to account? At least worth a try.
 
Sounds like you knew about the illegal structure before you exchanged?

I don't think so.

...inspection also took place during the conditional offer period. I have it in writing from them to the council that they informed their conveyancer and their real estate agent of this during the conditional offer period, however no one informed us. Obviously if we knew that the council had a pending investigation about a structure on the property during the conditional offer period, our negotiations would have taken a much different course...
 
It is a **** situation but nothing you were not aware of when you handed over hundreds of thousands of dollars to take ownership. Suck it up and pay the money. Treat it as an expensive lesson.
 
I thought it was the buyers responsibility to check whether relevant permits exist on a property before purchase?

Most properties I have bought interstate seem to have something or another that isnt compliant i.e. verandahs, pergolas etc.

Whenever a structure was non-compliant we factored this into a reduction to our offer price - always seemed to get a big amount off the asking price and then we did the work to rectify afterwards to get it certified (usually at less than reduction price - but with us bearing the risk). It helps if you have someone on hand to advise you - this was not the conveyancer/lawyer.

I don't know legally whether you have a leg to stand on in chasing the vendor, you could end up in court and having to pay their costs! I am no legal expert however.

Personally, I think you should get advice from the conveyancer, but litigation is always a costly route! I would just either demolish the structure or pay to get it certified (circa $2000) and move on.
 
It helps if you have someone on hand to advise you - this was not the conveyancer/lawyer.

Do you mean you had someone apart from the conveyancer/lawyer advising you on permits etc. on the property? I've heard about purchasing agents who look after the whole thing on your behalf...

Thanks to all others for your comments, I agree it's not an easy one and perhaps not worth it, but I crave justice so badly!
 
I would have thought a good conveyancer/solicitor would have looked into it further before completing.
And the conveyancer was made aware that there was no permit from council in this case.
 
I am also aware that the previous owners received a letter from the council advising that an investigation was underway about the pergola while our offer on the property was still conditional, and that an inspection also took place during the conditional offer period. I have it in writing from them to the council that they informed their conveyancer and their real estate agent of this during the conditional offer period, however no one informed us. Obviously if we knew that the council had a pending investigation about a structure on the property during the conditional offer period, our negotiations would have taken a much different course, and we may have withdrawn from the purchase. We were issued with a section 32 for the property before they found out the investigation was underway, but since the offer was still conditional, shouldn't this have been added to the section 32 immediately, as the section 32 is a document which factors into our purchase throughout the conditional offer period??

I have also considered bringing action against my conveyancer, who has been of extremely little assistance after the Building Notice was issued. During the purchase I brought the structure to her attention as a concern, she told me to contact the council to see what had permits on the property, I did so and told her the pergola didn't have a permit, and she basically told me verbally "it's hard to say whether it needs one". In retrospect all she needed to do was check the council regulations and say "any pergola over 2m x 2m needs a permit, you have told me it is larger than that, so it was built illegally and this should factor into your negotiations". Is that reasonable to expect from the services of a conveyancer?

I'm a little confused. You seem to contradict yourself. Your conveyancer sounds lax, eg. asking you to check at the council for permits? :confused: But it reads, eventually, that you did know that the structure didn't have council approval yet you went ahead with the purchase regardless. In that case... I can't see why the vendor should be held responsible for any payment. Just my opinion, of course.
 
I'm a little confused. You seem to contradict yourself. Your conveyancer sounds lax, eg. asking you to check at the council for permits? :confused: But it reads, eventually, that you did know that the structure didn't have council approval yet you went ahead with the purchase regardless. In that case... I can't see why the vendor should be held responsible for any payment. Just my opinion, of course.

Oooh. In the wall of text I missed this part...
 
I'm a little confused. You seem to contradict yourself. Your conveyancer sounds lax, eg. asking you to check at the council for permits? :confused: But it reads, eventually, that you did know that the structure didn't have council approval yet you went ahead with the purchase regardless. In that case... I can't see why the vendor should be held responsible for any payment. Just my opinion, of course.

Sorry for the confusion, but basically I didn't know how to get a definitive answer on whether the pergola needed a permit or not, my conveyancer didn't seem to want to, or know how to, pursue it.In retrospect I should have forced the information out of my conveyancer or council, but being a first-timer I didn't. Poor legal advice basically.

I still need to find out however whether the vendors were obligated to disclose the council letter and inspection to me, which they became aware of during the conditional offer period. I would have either negotiated them down on price, or had them resolve the issue during our 3-month settlement (if that's even possible).
 
Sorry for the confusion, but basically I didn't know how to get a definitive answer on whether the pergola needed a permit or not, my conveyancer didn't seem to want to, or know how to, pursue it.In retrospect I should have forced the information out of my conveyancer or council, but being a first-timer I didn't. Poor legal advice basically.

I still need to find out however whether the vendors were obligated to disclose the council letter and inspection to me, which they became aware of during the conditional offer period. I would have either negotiated them down on price, or had them resolve the issue during our 3-month settlement (if that's even possible).

This is why you should only use a property lawyer for conveyancing and not a conveyancer. You may have an action against the conveyancer for negligent advice.
 
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Sorry for the confusion, but basically I didn't know how to get a definitive answer on whether the pergola needed a permit or not, my conveyancer didn't seem to want to, or know how to, pursue it.In retrospect I should have forced the information out of my conveyancer or council, but being a first-timer I didn't. Poor legal advice basically.

I still need to find out however whether the vendors were obligated to disclose the council letter and inspection to me, which they became aware of during the conditional offer period. I would have either negotiated them down on price, or had them resolve the issue during our 3-month settlement (if that's even possible).

When you went to council and found out it didn't have a permit why didn't you just ask them if it needed one? They are the ones, after all, that supply the permit. They would have easily been able to tell you if it was needed.
Sounds like you were a bit negligent, seeing as you knew it didn't have a permit. The owners don't have to disclose anything. That's what searches are for, to find out these things.
 
This is why you should only use a property law for conveyancing and not a conveyancer. You may have an action against the conveyancer for negligent advice.

...what he said. If it were me I probably wouldnt want to fight with a lawyer on legal matters over 2-4k it could be a zero sum game but I would certainly talk to them about the quality of their advice and ask for a refund.

And as pinkboy said - this game isnt about justice. Just moving forward.
 
Do you mean you had someone apart from the conveyancer/lawyer advising you on permits etc. on the property? I've heard about purchasing agents who look after the whole thing on your behalf...

Actually it was just my brother who was co-purchasing with me.

He could sense a structure looked fishy and would follow up with the relevant department to check if it had a permit. Typically these were interstate properties in cyclone areas so these kinds of things were important to us.

I think most purchasers don't do this step or if they do, they pull out of the purchase because they are scared of the risks. My brother was good at estimating the work/effort required to certify so we were able to negotiate well.
 
Thanks to all others for your comments, I agree it's not an easy one and perhaps not worth it, but I crave justice so badly!

I think your anger needs to be directed at the conveyancer, not the vendor.

Well, justice is supposed to be blind. Having your eyes covered makes it difficult to aim your ire properly, I guess.

hrvatski, if you're going to get this worked up every time something 'unjust' happens to you, you're not going to survive in the property game.
 
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