Probably illegal work on house, offer is still conditional - what are our options?

[EchoPark]

Hi everyone! I'm a long time lurker first time writer so it feels like I kinda already know a lot of you! lol! Here is our situation...

We found this house we really like, made an offer which was accepted and had this clause on the S&P:

"This agreement is conditional upon the purchaser obtaining and approving a building report fo the Property, including any engineering issues 15 working days from the date of this contract. This clause is inserted for the sole benefit of the purchaser and may, at any time prior to the agreement being cancelled, be waived by the purchaser giving written notice the vendor."

Offer is also conditional on LIM report.

The house is from 1991 (Auckland), we were pretty confident that was a good year! So we had a building report done straight away and the kicker is that I think there is illegal work under the house. The house is on a slope and at some point (REA says not current owners) excavated part of the earth under the house to make a flat space for a car and inserted a DIY garage door. (No concrete or anything, just flat earth.) First problem is that they excavated around the support posts and we are now having an engineer come look at it. However, that can most likely be fixed. My concern is that this "project" is not legal and has no consent. The building inspector said that if it was done before 1992 council would have no record and we would have to get a certificate of acceptance. If it was done after 1992 with no consent I'm not sure what our options are.

I have ordered a LIM report which should arrive in the next couple of days and I'm going to look at the property file tomorrow. Can you please advise me, good people, as to what our option are if this work is not recorded anywhere? (Please don't say "Decide if you like the property enough to pay for consent etc." I'm after specific steps I can take here.) My mum reckons that the vendor should pay for all consents but I haven't talked to the lawyer yet.

Thanks

[AMR]

Just take photos, go to council and ask. You have nothing to lose at this point if council find out.

[Winston001]

(Please don't say "Decide if you like the property enough to pay for consent etc." I'm after specific steps I can take here.) My mum reckons that the vendor should pay for all consents but I haven't talked to the lawyer yet.

Well ok but frankly what you reject is good advice.

Steps: you need an expert (a builder is fine) opinion that there is unlawful work.

Your lawyer tells the vendor's lawyer of the problem. The vendor can refuse to put the matter right. Its then your turn to make a decision.

[Ivan McIntosh]

Unless they caused the works to be done themselves, in which case you can shoe-horn it under breach of warranty (see 6.2(5)) rather than the LIM condition provisions or just general negotiation (which is arguably what this would be, not a LIM condition matter at all as you are already dissatisfied).

The other possibility: Look in the property file for copies of requisition letters from Council to the owner about the excavations and garage door. There probably aren't any but you never know. Do this before looking at the LIM, so if there are any letters then once again it is a breach of warranty matter under clause 6.1, not a LIM condition matter.

You can then start talking about deductions from the purchase price or delaying settlement....it's a matter for negotiation....but you'd have the upper hand.

[LevenRiver]

There was a whole bunch of unconsented work on my PPOR. I visited the council in person, had a chat to a nice bloke there, who said that they would only do something if someone complained - even if the council knows.

He handed me a complaint form.

In the end, we negotiated money of the purchase price.

[EchoPark]

Thanks for the advice so far. I did get a property file today and no, it's not on there. However, in the house plans it says that there is potential for an under the house garage which doesn't really mean anything I guess.
Also talked to the council lady. She wasn't very helpful, gave me a leaflet about unauthorised building work and told me to talk to my lawyer. On the council website it says that if you have unauthorised work from after July '92 you can either apply for a certificate of acceptance (with a ridiculous bunch of evidence) or get consent to demolish and rebuild. Which do you think would be easier? Certificate of Acceptance or demolish and rebuild?

[Ivan McIntosh]

Not buying the house would be easier. Why make any potential complications your problem?

If you really like the house and wish to disregard that advice, then you need professional opinion on whether the job has been done properly or, if not, what needs to be done to fix it and, in either case, how much it will cost to get a Cert of Acceptance.

Then negotiate that off the purchase price, with a margin for error. Your lawyer is the best person to do that, but you can also put helpful pressure on through the agent concerned, who obviously will not wish to see the sale fall through.

Regards
Ivan

[eri]

take the door off

backfill the earth

and later

apply for consent to put a garage under there

something like that

[EchoPark]

Thanks guys! I have emailed my lawyer about it and I'll ask the engineer as well what can be done.

Ivan: Not buying the house... except everything else is fine and we really like it. You're right that it is a complication but I don't think it's a major one as the garage is not a proper, concrete filled, walled thing. It's just earth removed and garage door attached.

[Ivan McIntosh]

Could be better to start from scratch and not go down the Cert Acceptance route then, but for the purposes of your negotiation on the price you still want to proceed on the basis of costs incurred if you were.....

Good luck!

[Meehole]

take the door off

backfill the earth

and later

apply for consent to put a garage under there

something like that

I agree! That's what I would do but I would probably try and use it as leverage to knock a few $$ off as well.