Before signing on the dotted line buyers should make sure the property owner has obtained all the required building permits for works that have been completed. The new owner becomes responsible for any illegal works, this could mean costly rectification.
If the vendor has undertaken works on the property as an owner builder that were over $16,000 within six and a half years of sale, the following documents should be included in the vendor’s statement.
- A building defect report carried out by a qualified building inspector that has been undertaken not more than 6 months before the contract of sale is entered into.
- The domestic building insurance certificate.
- A copy of the building permit if issued in the preceding 7 years.
- A copy of the certificate of final inspection or occupancy certificate.
If the vendor has undertaken work on the property within the previous 7 years where they have engaged a builder and required a building permit, they should disclose the following information in the vendor’s statement;
- A copy of the building permit.
- The domestic building insurance certificate (if work is valued at more than $16,000).
- A copy of the certificate of final inspection or occupancy certificate.
If the above information is not provided a buyer may be able to avoid the contract prior to settlement.
When inspecting a property, buyers should be on the lookout for any alterations or additions that appear to have been completed in recent times and/or works that do not comply with building regulations. Identifying such non-complying works is not easy for the novice property buyer.
If it was proven the vendor carried out works on the property and did not obtain the required documentation the buyer would be in a position to either not proceed with the purchase or factor in potential rectification costs in their offer price.
