First Home Buyer - Advice Needed on a Townhouse with Easement

SydOzber on 09/05/2018 - 11:09
Last edited 09/05/2018 - 11:21 by 1 other user

Hi all

Need your expert advice on this topic

We liked a townhouse and were about to sign the contract(at $10,000 more than what we thought it’s worth) for our first home on Monday evening. Luckily, I’ve contacted solicitors office to get their details and they asked if I want to get a free high level review before I sign and pay the 0.25% deposit. The agent has insisted to come in and sign us on the day at any cost(even if it’s 10 pm, saying there’s some other offer blah blah).

We pushed it to Tuesday morning, to only sign after getting solicitors advise. It came out that out of the 6 units in the complex, 2 of them are built over an easement, of which one of it is what we are planning to buy.

The solicitor mentioned that the easement is encased and the building is constructed legally. I would like to know what would be the complications in future, if I decide to negotiate on the price ?

Few things I can think over is
- In future, if I want to sell the property, there will obviously be less interest from buyers and might impact the price
- Repairs - as it’s a strata property, every owner in the block has to agree for the cost of repairs

Other points:
- Building is 12 years old.
- This complex has 6 units.
- The one on the front(facing the road – 240 m2) has been sold for $685k couple of weeks ago.
- The one in context is the last one(away from the road – 307m2) in this block – secured and private as per the advertisement.

Thanks in advance for your help.

Home & Garden

Comments

  • Baysew on 09/05/2018 - 11:14

    Need your expert advice on this topic

    Luckily, I’ve contacted solicitors

    Shouldn't you rely on professional expert advice, that have all the relevant details, rather than just get internet opinions?

    How can a question like "I would like to know what would be the complications in future" really be answered here?

    • SydOzber on 09/05/2018 - 20:19

      Was just hoping to get responses based on experiences

  • Skramit on 09/05/2018 - 11:18

    Don't actually know what you're asking for…

    You can't build permanent buildings over easements. That's about it in terms of complications. What exactly are you trying to ask here?

    • dcep on 09/05/2018 - 11:34

      yet his solicitor mentioned the building is constructed legally.

      • stirlo on 09/05/2018 - 12:39

        What does your solicitor say? What kind of easement is it?

        • SydOzber on 09/05/2018 - 20:20

          Sewage easement

    • datafellows on 09/05/2018 - 13:26

      Yes you can in some cases, had a chat with builder few months back. They mentioned something called encased etc, cannot remember :P just as Ugly said below.

      For the OP, it is good to visit more open homes before making decision to buy. You said this was your first?

      Also, your solicitor need to go through everything and give you comments before you sign anything. Otherwise you might lose the 0.25%, or potentially much more.

      Anyway I would steer away from property which has easements unless it's cheap.

      There was a town house complex with strata nearly $1800/quarter, buying to strata you have to find out a lot of things. For example if majority of owners are investors, liveability might take a hit etc.

      • SydOzber on 09/05/2018 - 20:27

        Thanks for your response and experience

    • SydOzber on 09/05/2018 - 20:25

      Complications of a townhouse built on a easement

  • [Deactivated] on 09/05/2018 - 11:34

    REA being more than responsive and into the territory of pushy.

    Doesn't raise any alarms.

  • tsunamisurfer on 09/05/2018 - 12:24
    +2

    If the easement is encased and in future the Water Department needs to get to their pipe (as an example), you will be left with a yeard of broken concrete / aggregate.

    Can you handle that?

    • SydOzber on 09/05/2018 - 20:29

      That’s a good insight on the problem

  • Richardc on 09/05/2018 - 12:26

    no comment without the floorplan

    • SydOzber on 09/05/2018 - 20:32

      Understand

  • steff on 09/05/2018 - 12:29

    What's the easement for? Power lines? Sewer line?

  • Ugly on 09/05/2018 - 12:37

    I'm guessing you are referring to a sewer line? If so, then if the main has been encased in concrete, then it should not be a problem.
    (The terminology in this case is sometimes called making the main "maintenance-free", which should give you an idea of how those who know view it!)

    Also, the local water authority would have had to approve the works prior to the building being constructed over the main (hence the easement). If they thought there was any risk of needing to get access to it, they would not have approved the build. There are also remote / robotic methods of access in the unlikely event that repair is ever needed.

    • steff on 09/05/2018 - 12:41

      Still room for major headaches down the line. I wouldn't touch it unless its an absolute steal of a bargain.

      I'd expect others to think of it the same way if/when reselling too.

      • Ugly on 09/05/2018 - 12:56

        It all depends on whether this is an Authority Easement or a private easement.

        If the pipe is a main, and the easement belongs to the Authority, then your financial liability is nil.The Authority have approved the works & accepted that they will have restricted access to their asset in the future. If the pipe fails, it's not your fault or responsibility to fix it.

        However, if the pipe is a private sideline, then the pipe & easement belong to the Strata & any repair costs lie with them.

        OP needs to verify who the pipe belongs to.

        • steff on 09/05/2018 - 13:01

          True.

          My comment was more around inconvenience though if/when something happens, not so much around the financials. But you're right. if OP can live with it then by all means.

        • SydOzber on 09/05/2018 - 20:32

          @steff:
          Thanks ugly and steff.
          I’ll try to get information if it’s private or authority

  • JIMB0 on 09/05/2018 - 13:17

    If the pipe fails, it's not your fault or responsibility to fix it.

    True, however if they had to demolish anything of yours to access their asset you are left to repair your own asset (ie. concrete floor in garage)

    • Ugly on 09/05/2018 - 16:27
      +1

      I'm only familiar with Sydney, but if you have approval from Sydney Water to build over one of their mains, then in the unlikely event that they do have to demolish anything, they must fully restore it or pay you to have it restored.

      Section 41 of the Sydney Water Act says
      (1) The Corporation, in exercising its functions under this Division, is to do as little damage as practicable and is, subject to this Division, to compensate all persons who suffer damage by the exercise of the functions.
      (2) Compensation may be made by reinstatement, repair, construction of works or payment.

      It's only if you failed to get approval that you may suffer costs.

      • JIMB0 on 09/05/2018 - 18:11

        I was looking at a house here in Victoria that had a large shed with concrete slab built over a sewer main. The permit in the section 32 specified reinstatement would be at the owners expense.

      • SydOzber on 09/05/2018 - 20:37

        Good to know
        Need to check if they’ve included a permission letter from Sydney water

  • boomramada on 09/05/2018 - 16:47

    Its not uncommon to have townhouse with easement, where there is group of house involved.
    Since its not a big deal, not sure your chances for negotiating, but try find out? nothing to lose.

    • SydOzber on 09/05/2018 - 20:37

      Thank you
      Will try to negotiate on this point and will see how I go

  • jhmtaylor on 10/05/2018 - 09:17

    You will experience problems with finance when the lender sees the issue.It will also be more difficult to sell when the time comes.
    It is normal to seek a deep discount when dealing with buildings that have serious problems.
    I would walk away.

    • SydOzber on 10/05/2018 - 12:09

      experience problems with finance when the lender sees the issue

      That's not good.

Login or Join to leave a comment
Login Join