Buyer Beware – Building Approvals

Where are the building approvals?
 
Are you considering buying a residential or commercial property? If so, your legal team is likely to raise a variety of options for searches that can be undertaken to check you are getting what you are paying for and not inheriting unwanted issues from the previous owner.  A search to check if the property has the appropriate building approvals is one of the most critical you can request.
 
Building approvals
 
Since the introduction of the Building Code of Australia and the Building Act in 1975, any improvement built on a property must have a building approval. These were introduced to ensure that any improvements (including commercial buildings, houses, sheds, patios and extensions etc) meet a set of minimum construction and safety standards.
 
Building approval applications are lodged with the relevant local government and the approval must be received before commencing construction on an improvement. The application is lodged with Council, who will set out in a decision notice any conditions they think are necessary, along with any requirements from any other government agencies/authorities. An accredited private building certifier conducts inspections of the various stages of the build and once completed conducts a final inspection. The private building certifier is required to lodge the building approval and final inspection certificates with the local Council and this is what a building approval search will reveal.
 
What should you do?
 
On your request, your lawyer will search records held by the Council to determine if all improvements were given the required building approval and final inspections. We can order a records search which provides a summary of the details held by Council or even a physical inspection search where the Council will attend the property and provide a report. This search is an investment for any buyer given the potential implications of buying a property without final building approvals which may include:
 

1. future re-sale issues for you, which could see a buyer terminate a contract if they identify that all approvals were not issued or a buyer may request that a seller finalise building approvals or even reduce the purchase price to take account of unfinalised issues; 

1. insurance issues where your insurer may refuse coverage under a policy when a claim is made, due to the lack of approvals; or 

1. Councils are empowered to require the finalisation of building approvals and can issue show cause or enforcement notices on a property owner.

 
Our Commercial and Property team can assist you to buy a residential or commercial property, and to navigate the results of a building approval search.

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For further information please contact Amanda Tolson, Director.