Legal issue: bedrooms sold as 3 bedrooms unit nsw

Hi all , happy Easter...Imm

I bought 3 bedroom unit in 2015 .

All advertisement by agent was for 3 bedrooms.

Even , I went and saw it was 3 bedrooms. Bank approved Loan etc, however the 3rd bedroom is not council approved.

I came to know this 4 months ago when I went for refinancing with a bank and bank said it's 2 beds not 3 beds When I enquired with local city council they confirmed the third bedroom is not approved by council .

Then , interesting part .

- spoke to agent , he said it was what sellers instructions and he exactly done that.
- agent also said , the selling broker had 3 bedroom and warning that buyer died their own research. Because it has warning I should have done my homework.
.- spoke with my solicitor who settled this for me. He reckon it's not their part. How suppose they would know .Then they argue during settlement they ask questions with seller solicitor or agent and nobody (agent or sellers solicitor ) have this information. They want to charge me before they can even entertain me.. why use these if I had to do all the by myself. ?

Spoke with another independent lawyer , he said agent misrepresented , so the claim should come out of agents professional Indemnity funds.

- spoke to agent that it should come off your indemnity funs , he said we will fight vigorously. Said my lawyer didn't ask one question during the settlement and also said it's my lawyers incompetency.

I think the price difference between 2 bed and 3 bed in 2015 was $80k.

So I feel I am ripped off.
1. Bank won't refinance and
2. if I sell it , I can't sell it as 3 bedrooms.
3. Council wont approve 3rd bedroom as room is not big enough to NSW standard . The thief bedroom was carved out of the lounge room .

I am confused.

Just wondering , had anyone been in this situation ?

Is it my lawyers incompetency
Or
It is agents mid representation. ?

Happy to hire so.eone who has done before and go in the right direction. Don't want to burn money without the right direction.

Happy Easter ....

Regards
Harry

 

What are the measurements of the 3rd bedroom?

 

You sound confused.

What did you contract with your lawyer to do? What checks did you ask them to do?
You probably just contracted them to transfer title.

The agent on the other hand has made misleading and deceptive conduct which you replied on to buy the property. You also have legal advice as to this.

The agent themselves will not fight it. Their insurer will look at the claim and make a decision to either fight it, pay up, or make an offer to settle.

 

I don’t see how the agent could be expected to know that the third bedroom didn’t have a permit.

 

They would have done an inspection of the property. And they admitted it.

 

What due diligence did you undertake eg review of past sales of the property?

 

Hello all,
Thank you for the response. Much appreciated.

@Trainee
3rd non council approved is 4.3 x 2.6.

@Terry_w
Thank you for clarity. Indeed I am confused .You detected it truly as this is not my area of expertise .

The lawyer were just convincing the property. But I thought they will do all the things for me .Obviously they don't .

So you think only way to raise a class is against agent ?

@Joynz
Yeah that is exactly what agent is saying. Vendor gave them x y Ana's z and they exactly did that as they are sales person . They are not willing to give me sellers information .

Due deligence
I went and saw the bedroom. Third bedroom did look like not even a concert wall . If I had an idea that it's dodgy ,I would have checked the council . So kind of my mistake as I didn't know what to look for and I really was hoping all this **** is taken care by solicitor I was $3k .I trust them that they will do all the checks.
They asked me strata report ,I provided to conveyors/solicitor .

What could be the solution. ? Sorry

I was thinking to ring the seller directly and have a chat with him to see what he has to say. Would hi ms it be ethically okey I'd I ring him directly ?

 

A claim at Department of Fair Trading?

A refund because items purchased did not suit purpose?
Items not correctly described?

These apply to smaller items purchased not sure if could be stretched to property

 

Really good point here. May be property laws are bit different but let me ring them to see what they say .

 

What is the minimum size for a bedroom there? I would have thought the 2.6m side narrow but still useable. It would be legal here in Perth.

If it didn't have a window that would be a different matter.

Did you have a building and pest inspection? Generally a building inspection would have picked that up but they tend to look at the the Building Code of Australia and that there is no minimum size in the BCA so I presume it's a State law.

 

Sounds like your conveyancer/property lawyer really dropped the ball for you on this one.

 

What is your LVR ?
What is your reason for refinancing?
You have not lost an $80k bedroom, but gained a $50k study
Maybe this is an easy excuse for the bank !

 

Shared light & ventilation also permissible if it complies with the BCA.

 

Unfortunately I see this a lot, sometimes with illegal extensions, more often with illegal granny flats/dual occupancy.

The owner sometimes only finds out it is illegal (unauthorised works in council speak) after 10 or 15 years. Sometimes it is due to a neighbor having a noise complaint to council regarding the granny flat and sometimes it is when the owner is trying to sell and the prospective buyer does their DD and finds the unauthorised works.

From my experience the real estate agent can say mostly what they like without liability, the other parties can feign ignorance or not their responsibility.

In this case I guess you did not know the scope of work that the people involved were responsible for and the gap was checking the council records. From my experience the owners have to bear the burden in these cases but others here are better versed in legal avenues available.

 

Hello all
Thanks for your inputs. Much appreciated. I will response to each of your questions later .

In mean time , I did a few Google search and came across to similar case online on legal site .Here is the link to court document and conclusion.

• Case summary :

Huang & Anor v Ceylan [2018] NSWSC 306

• Recent case explored the breach of a statutory warranty of a Seller by failing to disclosure a third bedroom did not have the relevant council approval
• Resulted in the Buyer terminating and having their deposit refunded in full

• Lesson: To avoid issues after contracts are signed and give the contract every chance of settling, agents should ask the appropriate questions of their seller’s to ensure all relevant matters are disclosed to prospective purchasers.

Court link :

Huang v Ceylan [2018] NSWSC 306 (13 March 2018)

Do you guys think I should be able to do the same thing ? I e clearly agents misrepresentation.

Any thought .?

 

It appears that case was quite different. The discrepancy was used to rescind a contract according to your summary (without wading through the legal document).
Marg

 

have you settled yet?

 

I’m too tight to pay for a premium membership so I can have a signature but if I wasn’t, this would be it.

 

The vendor has died ?

 

@Beano - no he is still alive .My solicitor want to charge $50 to even provide vendor details .He has all the settlement papers. I Google the vendor and found the details but in not sure if it's legally right to speak to him directly. I suppose I should within any issue but one never know ,sometime we learn in a Hard way.

@Terry - mo not settled yet . Do you think the article above applies to my situation as well ?

@Marg4000 - too right agreed, however , if buyer here can quit with the same situation , I should be able to send same in similar way .

@Anthony416 -wowe thanks for detailed response . This is very vague area. Y mum and dad buyers won't know what the things are. So unless they give us a choice that you need to ha r these checks some.