Buying an existing house? Read this first

We’re often asked to approve illegal building work on a recently- or soon-to-be-acquired property. It’s not uncommon for someone to have bought a property where a studio, or a deck, or sometimes the entire house, has been built without a building permit. On some occasions the buyer has only become aware of this when they’ve been hit with an enforcement notice from their local council. On other occasions, the buyer has been aware of the unapproved status before the sale and has assumed it won’t be a big problem and is easy to fix. Sadly, this is rarely the case.

If you buy a property with illegal building work on it, you’re buying the liability of that building work. You’re paying for the privilege to get it demolished or retrospectively approved if the council decides to take enforcement action. And this can be costly and time-consuming and can somewhat dampen that new-purchase buzz.

Depending on the building, retrospective approval often requires:

• a building designer to prepare detailed drawings of the building as if it’s for a new permit,
• an engineer to confirm it is structurally safe and will stay upright,
• tradies to confirm the safety of particular components (e.g. the glazing, the waterproofing, or a wood-heater),
• a building surveyor to assess and certify all this documentation, and
• a retrospective building permit from the council.

Sometimes you may need to carry out additional building work to bring the building up to scratch, which means you’ll also need a builder. And if you’ve landed the enforcement trifecta and need to organise retrospective planning and plumbing permits as well, then this can broaden the scope of documentation you need even further.

Councils often charge higher fees for retrospective permits. And it can be challenging to get building practitioners interested in this type of work and can take some time to get the documentation prepared for approval. We have one project that has taken over 12 months and $25,000 to resolve the documentation alone, and another that cost $20,000 for the replacement of a low level deck.

If you’ve spied a dream property and want to make sure there’s no nasty surprises, you can apply for a Form 51 Building Certificate from the local council. The Form 51 requires the council to reconcile what’s on their records with what’s on site, and confirms they won’t be taking any enforcement action on the property. It provides assurance there is no illegal building work on the property and you won’t get sprung with a building notice down the track.

If the council doesn’t issue a Form 51, this signals their intention to take action in relation to the building work and enforce retrospective approval. You may want to walk away at this point, or you could use this as a bargaining chip to negotiate a buying price that properly accounts for the costs of obtaining a retrospective building permit.

A Form 51 costs anywhere between $200 and $1,000 depending on the council. But this is negligible compared to the cost of getting a retrospective building permit over the line. In our experience, the Form 51 is insurance and may be one of the most useful forms you can have during your property negotiation.