Selling your home when you have an unapproved structure

I was prompted to write an article about selling your home when you have an unapproved structure after selling a property recently that included an unapproved shed out the back. While the large Colorbond shed was almost new and structurally sound, the fact that it had not been council approved proved to be a deterrent for several prospective buyers. This article explains why this is an important issue and the steps you could take before you go to market to ensure you are not disadvantaged.

Council approval is usually required for the following kinds of structures:

  • Sheds 
  • Garages and carports 
  • Patios, decking and garden structures
  • Additions and alterations to the house
  • Fences and retaining walls
  • Water tanks

If you have added any of these structures to your home without obtaining council approval, it’s generally not a problem until it comes time to sell. It’s one of the questions you will be asked by a real estate agent once an addition or structure like a shed is observed on inspection and appraisal of the property.

If you have an unapproved structure and wish to sell, you have 3 choices:

  1. Try to sell the property without approval and take your chances by seeing how buyers react.
  2. Gain retrospective council approval.
  3. Remove the structure (few would choose this option unless the structure is unsound).

In our recent seller’s case, they opted to take their chances and sell without seeking council approval. It was a risky move which proved problematic. As mentioned, several buyers were put off by the fact that the shed was unapproved and simply did not want to take the risk of buying the property, including those who particularly loved the shed and normally would have bought the property with the shed being the main attraction! One buyer even offered a substantially lower price fearing council could force them to take the shed down or move it, making them wear all the associated costs. While this is a worst case scenario, it is nonetheless possible. Therefore, the buyer was only willing to take on the risk if a much lower price was accepted.

Gaining retrospective council approval

Here are the steps to gain retrospective approval:

  1. Contact your local council. This is the first step because there are different types of approval for different structures. They will advise if you need retrospective building and planning approval or just building approval for your unapproved structure.
  2. Engage a draftsperson to add the structure to your site and/or floor plan. If it is a more major extension or renovation, you may need new plans drawn up, including elevations.
  3. Submit the plans to council.

Alternatively, you could engage a private building surveyor to do it all for you or ask us and we can help.

Years ago, people would put up sheds, pergolas, etc. without obtaining the relevant approvals and generally people weren’t that concerned about it. It’s not like that anymore. That’s why it is one of the questions on the Sellers Disclosure Statement we complete with the owners when we list a property:

“During the term of the Seller’s ownership have all the buildings, improvements and fences been constructed in accordance with, and with approval of all relevant authorities?”

We are then required to disclose this statement to the prospective buyers.

We have had several instances where we have helped the owners engage a Structural Engineer to inspect the structure, advise if it is structurally sound, draw up plans of the structure and submit it to council for retrospective approval. This has cost around a tenth of what a buyer might reduce their offer by to take on the risk. Contact us for more information on this.

Post by ShelMarkblog 09 Jul 2021 0