John signed a Contract of Sale of Land to acquire a property where a dwelling was built on it over 20 years ago, settlement was due four weeks after signing. The Contract of Sale of Land was conditional on a building and pest inspection and approval of finance. All conditions were met and the Contract of Sale of Land went unconditional two weeks after signing.
Three weeks after signing the Contract of Sale of Land, the Vendor forwarded a Building Notice from the Council regarding an unapproved structure that was built on the land. As the Contract of Sale of Land makes a Purchaser responsible for all notices, John was now in the situation of rectifying the unapproved structure with the Council. The rectification required either ensuring the structure was built to Council requirements or demolish it.
John can request the Vendor attend to the notice and assist with the response to Council however the Vendor is under no obligation to assist. John could refuse to settle on the basis that the property may not be in the same condition it was on the day of signing the Contract of Sale of Land, if the Council request the structure to be demolished.
To prevent such an event occurring, a Purchaser should check to make sure that any additions, renovations or alterations made to a property received formal approval from Council. The Purchaser should also have the Contract of Sale of Land and Section 32 Vendors Statement reviewed by a solicitor/conveyancer to identify any potential issues/risks that the Purchaser needs to be aware of.
Building inspections are important to identify any structures that may be problematic or that have possibly been built without Council approval. In John’s instance the building inspection was conducted by a friend and not by a experienced Building Inspector.