Tim & Bruce's do up's!
Tim and Bruce made a living by purchasing run down properties, doing them up and flicking them off for a neat profit.
They had done this for the last couple of years and it had worked really well. They would often find properties that were in desperate need of a tidy up. They stayed clear of anything that needed building work and Council consents.
Tim had seen a three-bedroom, brick and tile, basic house with a free-standing garage that ticked all the boxes. The property was up for auction in two days’ time. Tim got the property documents from the agent to check that the property had all of its building permits/consents.
Given the short time frame, Tim and Bruce decided they would just go along to the auction to see how much interest there was in the property. The agent’s auction room was full of people and potential bidders. However, interest in this property wasn’t particularly high.
Tim and Bruce saw great potential in the property and didn’t want to miss out. Once the work had been carried out to the property, it would be perfect for a first home buyer or a property investor looking for a low maintenance property to rent out. They decided to bid and were successful. Tim picked up the keys that afternoon so that he could start clearing the property out. Bruce would head to the property the following day to start removing the wallpaper, the carpet, the kitchen and prepare the walls for painting.
The property took 2 months to complete but it looked completely different once all of the work was done. They engaged their local real estate agent to commence the marketing campaign and were pleased when the agent came to them with a couple of offers. They decided to accept an offer that was subject only to a LIM report and Building report. A week after accepting the offer, they received an email from their solicitor. The purchaser’s had raised concerns with the LIM report. Council records showed the free-standing garage was encroaching on the neighbour’s property. The purchaser was requesting that Tim and Bruce correct the title for the property to remedy the encroachment.
Unfortunately, Tim never noticed the garage encroachment when we looked through the LIM report before they purchased. They would need to contact the neighbour to see if they could arrange for the boundary to be completed. It will be a costly and time-consuming exercise to get the title corrected as a surveyor and lawyers will need to be involved.
If you feel you could use some specialist advice, don’t hesitate to contact the Property Team.
