Ten warning signs a property may have problems – Part Three

August 31, 2015, 11:14 am Peter Boehm Yahoo7 Finance

Driveways and paving, renovation restrictions, alongside issues with a property’s history are key indicators of a problem property.

So far we have addressed the first four of my list of ten potential property problem areas:

1. Water damage
2. Uneven floors, walls and ceilings
3. Foundation problems
4. Plumbing issues

Also read: Ten warning signs a property may have problems - Part One
Also read: Ten warning signs a property may have problems - Part Two

In today’s column we’ll look at the next three areas being driveways and paving, renovation restrictions and limitations and issues with a property’s history.

5. Driveway and paving problems
6. Renovation restrictions and limitations
7. Problems with the property’s history

5. Check out driveways and outdoor paved areas

Driveways can help enhance a property’s curb appeal (not to mention providing access to the garage and carport!) as well as doubling up as a play area for the kids (where they can have game of cricket, shoot some hoops, or do whatever takes their fancy) while paved courtyards and backyards can enhance the look, appeal and enjoyment of outdoor living and entertaining.

Driveways and outdoor paving can also be expensive to repair, especially if major work is involved.

This is why it’s important to inspect them thoroughly to make sure there are no immediate or potential problems.

The main causes of damage to driveways and outdoor paving can include:

a. Poor workmanship
b. Concrete shrinkage
c. Movement due to settlement – resulting from similar causes explored in Point 3 Foundation Problems
d. Damage caused by tree roots – this is something I’ve experienced firsthand when the roots of our gum trees headed towards the surface and lifted the pavers in our driveway. This problem is more than just aesthetic. It can pose dangers resulting from tripping on exposed paver edges – something to be particularly mindful of with young children and older adults.
e. Excessive or heavy use – damage can occur through wear and tear if for instance a driveway has high usage (say in the case of a shared driveway for units or flats) or if the weight bearing limit is exceeded by a heavy vehicle, causing concrete to crack or pavers to sink.

You should be able to identify many of these problems yourself and if there are signs of damage it would be wise to get a quote from a builder or paver/landscape gardener to quantify the cost of repair.

Also read: Strategies to help young home buyers

6. Identify any future renovation restrictions and limitations

Many of us buy a property with a view that sometime down the track we’re going to renovate or develop it so that it better meets our lifestyle and personal needs or to add value so we get a better price when it comes time to sell or, if it’s an investment property, we make it more attractive to tenants thereby generating a higher rental income.

Whatever our reasons it’s important to check if there’s any restrictions on what can and can’t be done to the property.

In most cases there is unlikely to be major restrictions although it’s important to verify this by liaising with the local council to find out what is and isn’t allowable.

This is particularly important if your plans include extending the footprint of the house or unit and/or adding additional storeys.

A good starting point is to check out the other properties in the street and neighbourhood to see what other owners have done/been allowed to do and whether this aligns with your plans.

However, this should only be used as an indicator and you must always check with the local council first before starting any major structural renovation or incurring any builder or architect costs.

In addition, even if you can undertake the renovations you want, you need to make sure you don’t over-capitalise, spend money that might actually reduce a property’s attractiveness or discover the cost of the renovations you want are much higher than your expectations and budget (this might occur because of problems with the existing structures/foundation, land shape or property access issues).

In these cases, a visit and discussion with some local selling agents as well as initial no-obligation discussions with local builders would be beneficial.

In any event, if the property doesn’t have the renovation potential you seek, either because of council restrictions, cost limitations or the likelihood you may over-capitalise for the area, then you would be better off walking away and finding a more suited one.

Also read: Low rates a boon for home buyers? Not necessarily

7. Check out the property’s history

The flip side to investigating whether you can renovate yourself is to look into what renovations and repairs the current owners have undertaken.

This is done to protect yourself against illegal and dodgy work. Some key questions to ask include:

a. Why were the renovations done? (You want to check whether there was a major problem that needed fixing or whether it was done to improve the property)
b. Who did the renovations? (You want to get comfort that a licenced tradesperson undertook any major works and whether any guarantees or insurances would transfer to you on sale)
c. Did you get council approval? (You want to make sure that any major improvements were approved and are legal. If the renovation was done on a strata title property (like an apartment) you need to make sure it was carried out and approved in line with the strata’s rules and regulations.)
d. Can you provide the necessary certificates/letters of authorisation? (This links to points b and c above. Here you want to see building permits, electrical certificates, product warranties, copies of insurance certificates etc.)
e. Have there been any problems with the renovations? (This question relies heavily on the vendor’s honesty and is designed to help you avoid inheriting the vendor’s issues, like for instance, existing or potential claims under Builders Warranty Insurance)

If it turns out that the vendor did most of the renovation work, and he/she is not a licensed tradesperson, and this includes structural changes, rewiring and plumbing, then you need to be cautious.

For instance, structural changes whereby a load bearing wall is removed and the remaining structures are not reinforced, could result in structural integrity problems, while DIY electrical work can be downright dangerous.

So if you identify potential problems with the property’s history and you are serious about buying, prepare a list of these problems and hand it to a property inspector so he/she can cast a trained eye over them and provide you with an independent report and assessment.

In my next column we’ll review the last three problem areas on my list – electrical wiring issues, pest damage and issues concealed by a new paint job.

Peter Boehm is the Finance Editor of onthehouse.com.au which offers a unique information source on virtually every property in Australia and provides data on a property’s sold and rental history as well as current property valuations. The onthehouse.com.au Investor Centre provides research on suburbs, market update reports and calculators to help investors make informed property decisions.

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