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Buying a home next to a development site - how a $300 search could save you thousands

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Media Release

Published on

Homebuyers considering purchasing property next to development sites are being warned they may have fewer options than they think if things go wrong.

Slater and Gordon Conveyancing Lawyer Robert Kern has seen numerous instances where developers go broke and leave neighbours with no viable legal avenues.

“Each state has different disclosure requirements, but generally a seller has no obligation to inform buyers of any nearby development approvals, unless construction is already damaging or is likely to damage the property they’re trying to sell,” Mr Kern said.

Mr Kern said homebuyers can be left in a tough legal position if their property is damaged down the track.

“The difficulty lies in how apparent the problem is: it’s easy to see broken windows, but latent defects including issues with the foundations of a home are much harder to spot,” Mr Kern said.

“Not only do buyers have to prove either the property had already been damaged or there was a high chance of damage at the time of sale, they also have to prove the seller was aware of the damage or potential for damage.”

Mr Kern said stalled developments often cause headaches for neighbours.

“If development is going well, there are usually no problems, but if the developer goes broke, corners can be cut and sometimes work stops completely,” Mr Kern said.

“If the situation causes damage to a neighbouring property, the owner does have a right of action, but the developer has no money so recovering damages can be almost impossible.”

Mr Kern said the best protection for homebuyers is to be proactive. His top three tips are:

  1. Investigate, investigate, investigate
    Reports from engineers and other assessors can identify costly pre-existing defects.
  2. Council searches
    It’s cheaper and easier to do a $300 search for nearby development approvals, than pursue a $30,000 claim for damages in the future due to a project you weren’t aware of.
  3. Obtain legal advice
    A solicitor can help you decide which searches you need and can also help with any problems that might eventuate.

For more information, visit our Conveyancing services.