Damien and Liz made some internal structural alterations to their inner city apartment.  They didn’t think to check whether they needed a building permit or for it to comply with the Building Code.  They decided to sell up and move into the suburbs, but major difficulties arose when trying to sell their property.

When signing an Agreement for Sale and Purchase of real estate, the vendor or seller warrants that where work has been done on the property which requires a permit or building consent, they have obtained the required permit or consent and carried out the work in accordance with that permit or consent.  If they haven’t done so, they have breached the agreement

If the contract to sell is unconditional, in most situations, the purchaser still has to settle and cannot cancel the contract based on this.  The purchaser has to pursue the breach of warranty separately as a damages issue by getting the seller to pay to fix the problem, holding money back or at worst suing the vendor.  Purchasers should always investigate this before the contract is confirmed.