Financing house with unapproved stairs

Discussion in 'The Buying & Selling Process' started by arescarti42, 9th Oct, 2019.

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  1. arescarti42

    arescarti42 New Member

    9th Oct, 2019
    Hi folks. FHB here looking to purchase a house at auction in Canberra in a few weeks.

    The compliance report for the house in question notes several unapproved structures:

    -garden sheds
    -internal access stairs to double garage underneath house
    -removal of a sub-floor pier for the stairs installation.

    My solicitor flagged the stairs and missing pier, and said that banks frequently won't lend for places with unapproved modifications to the roof or sub-floor.

    My lender has confirmed that given the unapproved structures and alterations they would be reluctant to lend above 80% LVR (I was hoping for 85-90) and would require proof of funds to rectify the issues. They've also suggested getting a valuation report on the property prior to the auction to see if they can accept the property.

    Does anyone have any experience with unapproved structures/alterations and securing finance? In my house hunt, most of the places i've come across have had at least an unapproved pergola, others have had unapproved garage conversions, granny flats etc. None seem to have had any issues selling - who's buying them if banks won't finance them?

    Googling yields lots of results regarding issues with council, or people not being aware of unapproved elements, but not any troubles with finance.

    Appreciate any thoughts given my inexperience.
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney

    18th Jun, 2015
    Australia wide
    It will come down to whether the valuer comments on it. If the valuer doesn't mention it the bank will not know.
    Probably pretty risky if buying at an auction.
    Simon Moore likes this.