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  Released: 24 January 2009

 

Buyer beware of building covenants

 

Joe Welch

Those looking to build in estates with building covenants need to ensure they get approval for their home before they begin construction or risk being forced to make costly alterations, a Gold Coast solicitor has warned.

Hickey Lawyers partner Joe Welch also urged those who plan to demolish or renovate a house in a community titles scheme with building covenant by-laws to first receive the nod from the body corporate or review board.

Building covenants are in place in some of the Gold Coast’s leading residential communities.

Mr Welch said they were also being adopted in an increasing number of new communities in order to set, and maintain, a particular standard.

“Developers use building covenants in order to ensure a certain quality of housing is developed in the estate, therefore protecting property values within the community,” he said.

“However, in some cases, these covenants can be very strict and some people can find themselves unknowingly breaking the rules and getting caught out because they have not met the requirements which can be very particular in some cases.

“If it doesn’t meet the cut, the developer or body corporate can come in and order changes be made or, in extreme cases, demolish all or part of the home.”

Mr Welch said purchasers of existing homes in estates with building covenants had also been caught out.

“There have been cases where people have bought homes and later found out they do not meet the building covenant of the estate and therefore require costly alterations,” he said.

“This may involve fixing certain parts of the home or knocking them down altogether.”

Mr Welch said in some estates homes actually needed to meet the standards of an architectural review committee.

“There have been instances where people have spent thousands of dollars on a top rate architect to design their dream home, only to find it doesn’t make the grade with the review committee,” he said.

“Therefore, it is imperative that those looking to build in estates with building covenants or architectural review committees have a keen understanding not just of the standard, but the style, of property required.”

Mr Welch said property owners also had to be careful when on-selling land in tightly controlled estates.

“In most cases, building covenants must be passed on to successors in title and therefore sellers have to be careful to pass on to the buyer the building covenants that apply to their estate if their contract with the developer requires them to do so,” he said.

“Failure to do so could leave the seller at risk of being sued by the developer.

“In the rush to sell properties at this time of the economic cycle these details can be over looked and, as most developers take building covenants very seriously, they will take action to enforce them.

“With an array of incentives currently being offered to first home buyers to encourage them to purchase in estates, inexperienced buyers should ensure the house and land package they are considering complies with any building covenants required.

”It is a good idea to seek proper legal advice so you know what you are getting into.”

 

View article - Gold Coast Bulletin 24 January 2009

 

For further information, please contact

Joe Welch, Partner
Tel: +617 5574 1000
welchj@hickeylawyers.com.au


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