Investment property build dragging on

Discussion in 'Legal Issues' started by Daniel Carrion, 11th May, 2022.

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  1. Daniel Carrion

    Daniel Carrion Member

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    19th Dec, 2015
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    Melbourne
    Hoping to get some advice on turnkey property that feels like it's never going to be finished.

    I started building with Snowdon Development through Vestbuild in Leopold, Vic September 2020 and only just in the final stages now.

    I won't bore you with the issues over the last year but it is really starting to sting not having a tenant in there and I have no idea when it's going to be ready for tenancy.

    Is it wise to just drop the builder and have a new one pick it up to finish the remaining bits? It's defect remediation and landscaping. What does that mean for warranty in the future?

    I've gone down the DBDRV and legal route but DBDRV is slow and litigation is so expensive. I am dreading when I have to call upon Snowdon Development when the inevitable maintenance issues start to come up.
     
  2. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Only a solicitor can review a contract to determine what penalties and costs you face by rescinding a contract. You may end up with no occupancy cert and no warranty and have a major problem. Lender may even seek repaymnet. If construction has commenced its possible no other builder would touch it unless appointed due to financial collapse of the original one.

    Defect remidiation - Are we talking a ceiling dent and a paint blemish etc or a structural issue ? Generally if you havent been given possession a defect is a matter for the builder not you. When construction is ready they handover. This doesnt mean its pristine and defect free. After handover you may have a limited period to advise evident defects for repair. Usually a single report within XX days. They then come back and fix the gyprock, paint or other issues. My house had a chipped tile, a few gyrprock and paint issues and a bath tap that didnt reach the bath. Structural covered by warranty. Around 10 years down track I called them to fix a leaning pillar for a gazebo.
     
  3. Daniel Carrion

    Daniel Carrion Member

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    Location:
    Melbourne
    Thanks Paul for your response.

    I have occupancy permit. I had PCI inspection done by an independant immediately after. But there's so many issues and landscaping is still not complete that it would a nightmare to have a tenant in there at this point whilst that is still going on. Things like cracked kitchen bench, LOTS of paint defects, plaster damage, missing door seals, etc... It honestly looks like it was built by a 5 year old.

    Sounds like I just have to keep waiting and injecting another builder at this point will end in tears.
     
  4. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    Also consider a complaint regarding the builder license to Fair Trading in your state if the workmanship is not acceptable and not being remedied. You paid and settled to acquisition I assume if there was handoever after the occ cert. So consumer law may apply OR its a building contract dispute as a consumer. Similar but different.

    Fair Trading will have a process for claims and it MIGHT fall under a XCAT tribunal. Seek enforcement or orders for damages to have the works remedies by a compteent tradeperson aftre sufficent time. You like MUST make a written claim on the builder first and allow suitable time.Did you do that ? Does the contract contain a process ??

    Ideal to get legal advice on this to make sure the builder is forewarned.
     
  5. Daniel Carrion

    Daniel Carrion Member

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    Location:
    Melbourne
    Occupancy permit supplied. Inspection took place. They're now remediating (slowly). No handover has taken place until all fixed and appliances are in. I will be getting another inspection after they've indicated they're done to make sure it was done. Then I'll handover.

    Fair trading put me onto DBDRV. Same with VCAT. I.e. I should go through DBDRV first. Sounds like they're trying to reduce number of issues in court. DBDRV process is painfully slow.

    Sounds like I just have to keep on waiting or blow a bunch of money on legal fees to try and speed up the process. Which makes things awkward because how much do you spend vs just fixing the last bits yourself. If it drags on for much longer I will do so.

    Thanks for the advice.