Recently, the Supreme Court had to decide whether a vendor who had made unapproved works to his unit could force a purchaser to proceed with the purchase of the unit.
The unit was constructed in 2012 on a development approval for a two-bedroom unit. When the purchasers inspected the unit in 2016 it contained three bedrooms and the unit was advertised for sale on that basis.
The vendor had created a third bedroom by constructing a wall on one of the sides of their media room thereby enclosing it.
The Court held that the works constituted a breach of an implied statutory warranty in the Conveyancing (Sale of Land) Regulations and, accordingly, the buyers were entitled to rescind the contract and have their deposit refunded in full.
The critical issue was whether a matter existed in relation to the building that would justify the making of an upgrading or demolition order and allow a rescission of the Contract.
The Court held that the new wall (which contained a doorway) was not a replacement or alteration of an existing wall and the result was the enclosure of an open area. Accordingly, the local council is entitled to make an order requiring removal of the wall and reinstatement of the unit in accordance with the approved plans.