This is a story about a property search I did in an episode of Location Location Location Australia. We were searching for a sea change home in Byron Bay for “farmer Dave” and found a strata property in a small complex of five villas. Inside, the layout and condition were pretty simple and functional and suited his needs well. But the feature that most appealed to Dave was the private north-facing courtyard with an established garden. It also had an outdoor shower, which was a great thing to have when so close to the beach!
After the second inspection, Dave confirmed that he could see himself living there and wanted to make an offer. So the first thing we did was to advise the selling agent of our interest and request a copy of the contract of sale.
I always look at the strata plan to confirm the square meters on title and on the first glance I noticed that the courtyard was not marked on the plan. What does this mean? Well, in this case, it meant that the courtyard was common property and not owned by the vendor of this villa.
This in itself is not that unusual, there are many instances of strata properties where an area of common property is used by one unit owner. Often this stems from an oversight in the original design, such as a roof cavity that could be used for storage or a “dead” space that could be used as an outdoor area, such as in this case.
But there needs to be evidence that the Owners Corporation have approved this use and this would have been done by the creation of a by-law.
So, I flicked through the contract of sale to look for the by-laws and saw that there was indeed one that gave Exclusive Use Rights to this unit for a section of common property. BUT, this permission was only for part of the space. Only the deck was referred to, meaning that the garden and fence were not included.
Now I am not a solicitor and cannot advise on a contract, and I could certainly see that we needed to get advice in this instance. We needed to know the risks associated with purchasing this property without this approval in place.
The legal eagles came back with some options – the most favourable being to try to get the vendor to agree to make permission a condition of the contract. Now, this may work as a strategy in a flat market but in a booming market, the vendor may not be so willing.
In fact, the vendor of this property had only bought it 2 years earlier, when the market was quite a bit stronger. And it appears that the deck had been built around 3 years before that. Which begs the question, why didn’t her solicitor pick this up at the time when she was buying?
At first, I thought this may be a case of negligence, but when I thought about it further I realised that this could quite easily happen. You see, unless the solicitor or conveyancer actually inspected the property themselves or at the very least looked at the advertising, they could easily overlook the fact that the courtyard was not covered in its entirety by the contract. And while a proactive property law specialist may routinely ask their client questions that could unearth the issue, the thought may not occur to many generalist solicitors.Don't fall into the trap of paying for something you not getting Click To Tweet
So, what is the upshot? Firstly, by using a buyers’ agent, Dave had somebody on his side that identified the issue and was able to negotiate a suitable outcome through his solicitor. So he did not fall into the trap of paying for something he was not getting. However, if that does not convince you of the merit of using an experienced buyer’s agent, it is up to you to communicate as much as possible to your legal representative. Perhaps you could provide them with the advertising material for the property and be very specific about what it is that you think you will be buying.
Now please take note that this example is a strata title property. A smart property lawyer will recommend that you get a survey if you are buying a Torrens title property to ensure that everything you expect is there – and nothing you don’t expect.
Published:- 11 August 2016
Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.
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