Melbourne man facing expensive dilemma after buying home with illegal structures


Updated

September 04, 2018 08:04:15

The house, in a northern working class suburb of Melbourne, was “blessed” according to the advertisement.

Key points:

  • Melbourne man purchased a home two years ago and has just learnt most of the buildings on the property are illegal
  • Whittlesea Council say the bungalow, garage and two sheds in the backyard were constructed without a permit
  • The owner now has to demolish the buildings or get permits, but either option will cost him thousands

In addition to features such as a wood fire and ducted heating, the advertisement drew attention to a bungalow out the back with a lounge, kitchenette, and semi-ensuite.

Then there was the “oversized garage plus workshop”, not to mention the garden shed.

Hao Dong was dazzled, and when the time came for the house to be auctioned in March 2016, he placed the winning bid.

He purchased the property in the hope that it could one day house his parents.

But a few weeks ago the illusion of a good investment was shattered when the council, having received a complaint the property was being used as an unregistered rooming house, revealed most of the structures on the land were illegal.

One of the previous owners of the property on Mill Park Drive had illegally erected a bungalow, a garage and two sheds in the backyard. Some were close to 20 years old.

“I was really shocked,” Mr Dong said.

“I know I’m the current owner of the property, but the thing is I didn’t build these things.”

Mr Dong, 32, had purchased the property on the assumption that everything was above board.

“[The real estate agent] didn’t mention anything so I assumed everything [was] legal,” he said.

“Now all these historical issues fall on my shoulders and I have to fix it.”

‘Our office holds no responsibility’

But in these types of situations the real estate agent who brokered the deal does not hold any responsibility.

That is because in Victoria caveat emptor, which in Latin means “let the buyer beware”, applies.

Prospective property owners are expected to perform their own due diligence to make sure they are happy with the property before buying it.

The real estate agency which sold the property to Mr Dong has told the ABC it was not aware the structures were illegal.

Whittlesea Council has now directed Mr Dong, who is originally from China, to get the correct permits for the buildings or, alternatively, knock them down.

“We are currently working closely with the owner to ensure that the site and all structures are brought into compliance”, Julian Edwards, the acting planning director at Whittlesea Council, said.

“Council’s primary concern is safety to human life and to ensure the site is compliant with building regulations,” he said.

“Fines or prosecution are usually only used as a last resort and we are confident that the owner is committed to working with council to address these issues.”

But bringing the buildings into compliance or demolishing them is set to leave Mr Dong with an eye-watering bill.

A building company has quoted him $8,500 for help getting permits for the structures, which does not include other costs like hiring tradesmen.

A demolition company has quoted him $7,800.

“I don’t have that much money,” Mr Dong, who works in retail, said.

“I can ask [for] money from my parents, but the thing is I don’t think it’s fair for me to do it.

“If I built all this up … I know I have responsibility to deal with it, but I didn’t do it.”

Illegal buildings ‘fairly common’

Mr Dong did not complete a building inspection, which is usually used to determine whether a property has any structural faults.

He did hire a conveyancer, but they did not uncover any indication the property contained illegal buildings.

That is not unusual, according to the Australian Institute of Conveyancers.

The chief executive of its Victorian branch, Jill Ludwell, said conveyancers did not inspect properties before they were purchased.

“They don’t know the property; they’re dealing with the title,” she said.

“They’re not dealing with what’s on that title, what structures are on that title.”

Ms Ludwell said illegal buildings were “fairly common”.

“When people buy properties, it’s usually more of a passion than anything else. I mean, they just get excited about the property, they can overlook things,” she said.

“A lot of people take out building inspections, and they’re good to a certain extent, but they can’t always see absolutely everything.”

She urged prospective buyers to take out title insurance, which is a little-known measure that protects against illegal or unapproved building works, unpaid rates and encroachment.

It is provided in Australia by two American insurers.

“It’s such a cheap insurance and it lasts the life that you own the property,” Ms Ludwell said.

“If you’re covered by that insurance then you’re actually home and hosed.”

‘A timely reminder for anyone purchasing a new property’

But according to the Financial Rights Legal Centre in NSW, it may not be wholly necessary.

“One alternative to title insurance would be to use your conveyancer or solicitor to make the proper enquiries … by getting a building report from the local council (to confirm whether there are any illegal/unapproved buildings on the land),” it said on its website.

The suggestion was backed by Whittlesea Council.

“We appreciate that the current owner [Mr Dong] has inherited the current challenges but this is a timely reminder for anyone purchasing a new property to undertake careful due diligence and ensure they contact their local council as early as possible prior to purchasing a property,” Mr Edwards said.

But that is of little comfort for Mr Dong, who feels he has been duped.

“They all say ‘we have no obligation’ and ‘we have no responsibility for this’,” he said.

“I don’t have enough money to pay for this.”

Topics:

building-and-construction,

local-government,

melbourne-3000,

mill-park-3082,

vic

First posted

September 04, 2018 06:26:51



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