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Changing your Property Requirements

Veronica's Blog: Episode 5

When we first met Dave he had a plan to retire to Byron Bay. But retiring for him meant anything but slowing down. After years of living a fairly isolated life on the farm, Dave wanted to crank it up a bit. He was looking forward to a vibrant social life and was keen to live close to the action. In fact part of his brief to us was that the property must have appeal as a holiday let so he could maximise the rental income at the same time as being able to use it himself for a couple of years before finally relocating north.

But after a sudden health scare which resulted in open heart surgery, Dave found he was forced to slow down. The recovery period for such a major operation is a long one, both emotionally and physically, and a couple of months after the surgery Dave was still a long way from feeling like his old self.

He decided to drive up to Byron Bay and spend some time recuperating with friends over the summer. While he was there he found that he no longer had the stamina to live in a busy location and decided he preferred to be away from the areas frequented by holiday makers. He seemed like a different person, more like your typical retiree, not someone looking to explore a whole new social scene.

My main concern with the change to his brief is whether he will revert to his original plan once he is feeling better. That this push for a quieter life is really a short term side affect of major surgery and the loss of confidence that often results. The worst outcome here is that he buys now and regrets his decision in a few short months.

As it happens when we first caught up with Dave in Byron Bay he had just come down with a bug and needed to rest up so we had to postpone our search. A month later we met up again to resume his property hunt. As I suspected, he was less interested in a quiet life once he was feeling better. Imagine if we hadn't delayed the search and he had made a decision when he was feeling so flat!

So with a healthier Dave back on board we got to business viewing properties and we found him the perfect beach pad with a private garden courtyard that he particularly liked. Now the first thing I always do when we find a property that our client likes is to request a copy of the contract of sale. And when that property is strata title (as are most villas, townhouses and apartments) one of the first things I look for is the strata plan, where you can check exactly what is on title and the precise size (Jin square metres) of the lot.

I got a bit of a surprise with this one as I could see that the courtyard garden that so appealed to Dave wasn't actually on title. In fact there was no outdoor space on title for this villa. This isn't always as bad as it might seem, as we often see an area of common property that has had exclusive use rights granted to a particular unit owner. And this was no exception, however there was a glaring omission in the by-law that grants exclusive use. In this case one set of previous owners had gone to the Owners Corporation and requested permission to use this space and to build a deck. Permission was granted, along with some conditions, which appear to have been met. Problem is that the request and subsequent approval were limited to the deck and therefore the garden and fence and gate were not included. So, in a worst case scenario, these could be removed and Dave would lose his garden and his privacy in a double whammy.

We had a lengthy discussion about this and whether the current owner is even aware that she does not own the courtyard. She had bought the property only two years earlier and the by-law had been passed just over three years before then. At first it seemed improbable that her solicitor could have missed this crucial point. But then I started to ruminate over how contracts are reviewed by solicitors and I can see clearly how this could have come about. It all comes down to asking the right questions.

Firstly, the agents advertised the property with a courtyard. The buyer inspects the property and sees the courtyard and thinks nothing more about it. The average buyer isn't aware of the possibility that the courtyard may not be on title, so they don't even question it.

Then they take the contract of sale to their solicitor, who doesn't ever physically inspect the property. 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

So we sought some advice and the legal eagles came back with some options that we will pursue – 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. Hopefully the buyers market will continue to work in our favour.

So, what is the upshot? Firstly, by getting our help, Dave has 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.

If you would like to read more of Veronica's insights on the property market, particularly in her own backyard of inner Sydney, go to

 
 

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