Section 173 - Grounds for claim?

Discussion in 'Legal Issues' started by albanga, 7th Jul, 2017.

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  1. albanga

    albanga Well-Known Member

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    Hi Team,

    I know I need to seek specific legal advice but I just wanted to pick some esteem brains first.
    I am sure most of you know that I recently subdivided my block and am now constructing to the rear.
    When i subdivided I had a section173 put on title across both lots which basically says "The development MUST be built as per the approved plans and planning permit".

    Since the 173 has gone on title, their are two things in which both houses require as part of the development.

    1 - A stormwater pit and pump (cost is 22k). This sits in the rear driveway but the front house connects to it and both houses require this to pump water to the street.

    2 - A City West Water connection and subsequent head works to install a new pipe (bored under the road) to service both properties to be installed (cost is 6k).

    I am the property developer so I am just going to pay for these costs but on legal grounds do you think the owner of the front property who purchased with a 173 agreement is liable for any of these costs?
     
  2. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    Not unless you contracted for it.
     
  3. albanga

    albanga Well-Known Member

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    Heya Terry,
    What do you mean by this?
     
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    When you entered a contract with the purchaser did they agree to pay for this?
     
  5. albanga

    albanga Well-Known Member

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    Not specifically no, but they purchased the house knowing a section173 was on the title of the property?
     
  6. thatbum

    thatbum Well-Known Member

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    Are they purchasing a finished house from you? Like an off-the-plan thing?

    If so, your job is the give them a finished house. Unless contracted otherwise, I don't think it affects them how much it costs you extra to do that.
     
    Terry_w likes this.
  7. lixas4

    lixas4 Well-Known Member

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    When you finalise a subdivision and seperate the titles prior to finishing/commencement of the construction of a development, councils like some assurance that the construction of the building(s) will be in line with the accepted development plans. In order to do this they use one of two methods; some councils require a section 173 agreement (planning and environment act), while some only require a restriction to be placed on the face sheet of the sub plan. Sounds like your council prefers the s 173.

    They both basically say the same thing, that you will construct the building(s) in accordance with the development planning permit. If you dont then you have to re apply for a new development planning permit. There is also a time limit.

    My understanding from your posts is that you have an existing house that is fully serviced, you have subdivided the vacant rear back yard and seperated the titles prior to construction, which included going through council and getting a development planning permit for a new rear dwelling, you have seperated the titles and sold the existing front house and now you are constructing your new rear dwelling. Part of the construction of the rear dwelling is that you upgrade the services connections, which will benefit the front house. And you would like the front house to chip in if possible.

    If that front house is fully serviced already i think you will find it quite difficult to get any cash from them. What do they have to lose? They have a fully constructed/serviced dwelling on their own title. You however, could lose your development permit.

    Also, which permit have the stormwater and water requirements been stipulated? I think you'll find these requirements are on the 'subdivision' permit, while your s173 agreement will probably be referring to your 'development' permit. (Yes there are two different permits, just to confuse everyone!)
     
    bmc and Skilled_Migrant like this.

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