VIC Section 32 of Sales of Land Act 1962 - Illegal Permit Issues

[picman2]

Why do we need a section 32 of Sale of Land Act 1962 if it doesn't have built-in protection for the buyer if a vendor lies about building permits and structures built during their term of ownership?

Then what recourse is there under property law if a new owner after settlement finds out no permits were obtained for garages and renovations done over for $16,000 in value? They were not registered owner builders. And with no insurance protection paid for. Obviously we need to get these permits approved otherwise it will no doubt become a problem if we sell in the future. Many of the works they did were illegal plumbing, building and electrical works with no permits or certification.

What recourse do we have now after property settlement?

 

[Sarah J]

Hi picman2,

If the vendor makes a false statement (whether under a section 32 statement or in the sale contract itself), then the new purchaser can sue the vendor for making misrepresentations and seek compensation (in this case: $16,000) for the cost.

If you have already completed settlement, and already paid the full purchase price to the vendor, then suing them for compensation is the only way to go. If you have yet to pay the full purchase price, you can retain part of this price until the vendor rectifies the defect.

If the garages and other structures have no permits, what is the actual effect of this? Is council taking problem with it? Has council effectively waived their right to enforce? How long ago was all this done? Is council still realistically able to go after these structures (usually, anything past 10-15 years is difficult to prove)? Basically, you need to figure out how likely it is for the council to take enforcement action and ask for the removal of these structures, and what you, as new purchasers, wish to have happen. Are you happy for the structures to be demolished and the vendors to pay for demolition/cleanup costs? Or do you want the structures approved? If so, will you be happy with the vendors paying the application fee and to sort it out? Or do you want to get out of the sale?

 

[picman2]

Hi picman2,

If the vendor makes a false statement (whether under a section 32 statement or in the sale contract itself), then the new purchaser can sue the vendor for making misrepresentations and seek compensation (in this case: $16,000) for the cost.

If you have already completed settlement, and already paid the full purchase price to the vendor, then suing them for compensation is the only way to go. If you have yet to pay the full purchase price, you can retain part of this price until the vendor rectifies the defect.

If the garages and other structures have no permits, what is the actual effect of this? Is council taking problem with it? Has council effectively waived their right to enforce? How long ago was all this done? Is council still realistically able to go after these structures (usually, anything past 10-15 years is difficult to prove)? Basically, you need to figure out how likely it is for the council to take enforcement action and ask for the removal of these structures, and what you, as new purchasers, wish to have happen. Are you happy for the structures to be demolished and the vendors to pay for demolition/cleanup costs? Or do you want the structures approved? If so, will you be happy with the vendors paying the application fee and to sort it out? Or do you want to get out of the sale?

Thankyou for your answer. The works are all very recent within a year with no qualified certificates or permits and all illegally done. We need to get our permits and the works built to permit requirements in case we sell otherwise others will no doubt seek action against us. So its not an optional risk for us. We are looking at getting a professional assessment prepared with required works and costs to get the permits approved and then we'll approach the owners with those costs from there. If it goes to court will be up to them after that. I suppose it will depends on what the report costs reveal. Not sure who edited that 16,000 cost above but owner builders insurance is required if works cost more than $16,000 as would be the case in this instance. Because they're not registered owner builders all works were done illegally including the plumbing, and electrical works. Lots of issues there. No permits, no approvals, illegal trade works, no insurance and no doubt a difficult and expensive time ahead for us at this stage. Much of the house has been renovated including the taking away of load bearing walls supported by false supports and external buildings with no permits. A nightmare to say the least.

 

[Sarah J]

Wow that's quite an unfortunately situation to be in. Be careful living in this house given that load-bearing walls were removed. You definitely appear to have an action against the vendors if they lied/misrepresented the purchasers about this during the sale process.

Property law is a fairly complex area, particular when it involves title and certificate checks. I suggest, if you haven't already, to speak with a property lawyer about your options and the merit of your matter. This is because, as part of the settlement process, the purchaser also has some responsibility to check the title and plans etc. Once requested, the obligation is on the vendor to provide accurate, complete information that is not misleading.