Pre-Settlement Inspection Issues

Hi all,

Thought I'd get the OzBargain opinion, and see if anyone else here has gone through similar to see what worked for them.
I purchased an off-the-plan apartment back in Feb 2018, and the time has finally come to inspect. After the builder set his 15 minute timer for us to frantically go over everything with a fine tooth comb, we found some minor issues, such as scuffs/dents on walls, paint overspray, etc. All have been logged with the builder and will be rectified.

However, when measuring the rooms, we found the dimensions to be quite a bit smaller than what was shown on the plan 3 years ago. I understand that a 5% variation is allowed as things do not always go to plan, but here are some specifics of the more drastic differences:

Main bedroom
Plan (approx) 3.2m x 3.5m
Actual (approx) 2.3m x 2.9m
(50% reduction!)

Dining
Plan (approx) 3.6m x 3.2m
Actual (approx) 3.2m x 2.8m
(25% reduction)

Other areas are similar to the plan we were given, though some are still within 5-30cm reduction (never larger, go figure).
My plan shows measurements from the external wall, which I believe is a factor for the smaller variations in other rooms. As for the main bedroom being 50% smaller, I can't imagine the walls taking up that much room. I've contacted the developer for further clarification, but ultimately they will not want a bar of it, so its best left to my conveyancer.

So my questions are. Has anyone experienced a similar situation? How did you resolve it? Did you settle? Was an offer made?

Yes, I agree with the upcoming comments on "don't buy off the plan". Lesson learnt, but I am lucky that the banks have valued it for more than what I signed for. Have that going for me at least… And I'm still trying to get the developer to own up to the fact that their incompetent sales team never handed over the signed contract for a free double sink (which my conveyancer is trying to follow up to countless ignored emails on their part) (Developer from hell I think?)

Update 1
Waiting to get the Strata Plan to determine if the overall area is within 5% of the signed size.
I've been informed by my conveyancer that due to the plan having a disclaimer that its a guide only, and given in good faith, that so long as the total area is within the tolerance, they are within their rights. Which sounds dodgy as @#!& to me, and am getting a second opinion just in case.
The above sounds like as long as you have been given the total area, it does not matter if they change wall positions, or remove a room entirely. Hell, why not just remove all walls for maximum saving?

Whilst I'm at it. The developer is also rejecting a double sink installation that was signed for because their sales rep never handed them the contract. My argument is that if I employ someone to act on my behalf, I also take on any incompetency they bring to the table, and that it should not effect the customer in any way…

Thanks to everyone who has offered suggestions, will keep this post updated as best I can. And as calmly as possible :)

Update 2
Had our second inspection with the same rude supervisor this morning. He rocked up 45 minutes late and refused to log any new issue we found into Hamilton Marino's system.
When drawing his attention to consistent blue paint splatter on white skirting boards, his response was, "You can tell me all you like", and continued to play with his phone. When asked if the paint on the floor boards would be cleaned prior to settlement, he stated, "No one can clean better than an owner", and that we would be given instructions on how to clean it ourselves.

As expected, more issues were created in the process of fixing the others, such as additional dents in walls.

Overall size seems to be within tolerance. Rooms are still smaller, but we must account for the external walls. Our rushed initial sizing with a measure tape were a lot more inaccurate than I realized. So apologies for reporting larger inaccuracies than what it is. I've attached the blueprint with our sizing in this update for reference here

We took a third party inspector (Correct Inspections) this time, and they picked up on a few more issues we missed, while also logging all our concerns in his report which has now been forwarded to Blue Earth Group (developer). They have since apologized for the way the supervisor acted, and have forwarded the report onto the builder to rectify. Correct Inspections did a great job with the report, highly recommend!

I would also advise anyone who wants to measure a place, go purchase a laser measure as it can be more accurate and quicker when given time constraints.

Thanks to everyone for their comments and suggestions!

Poll Options

  • 434
    Don't settle until the developer offers a solution
  • 7
    Settle, be happy with the potential gain in market value
  • 8
    OzBargain Bikies!

Comments

  • +14 votes

    Hope it doesn't become another Opal or Mascot towers.

    • +13 votes

      A few cracks in the walls should increase the size of the rooms

  • +59 votes

    That main bedroom is horrifically small. Even a double bed would look cramped never mind a Queen.

    • +9 votes

      Not wrong! 40cm either side of a queen mattress, and 85cm at the end!

      • +1 vote

        I would like to see OP's floor plan.

        • +5 votes
        • +1 vote

          I believe this is the case as well.
          Unfortunately I was unable to get the length of the living area as we were being rushed out. But I’m certain it will be shorter than expected.

          • +12 votes

            @Mr Random: If you've lost floor space then you have a good case to be compensated.

            I'm about to do some building and engaged an architect and one of the best pieces of advice I found was (this doesn't apply to you) make sure you have a cost target to keep architects to. They might want to design something that you can't afford because it is their artistic flare.

            I dare suggest that they cut corners to keep their margins not for your benefit. I'd be interested to see if the whole building is smaller or they maybe have done it to enrich themselves.

            • +7 votes

              @netjock: As an Architect, I can only wholeheartedly agree for owners (our clients) to be open about their budget as well any other constraints they may need to work to. The earlier it is brought up, the less stressful the process is and generally better outcome it will be for everyone involved.

              Dare I say 'good' Architects will work to the budget and introduce some of that flare if possible. =]
              And every step of the way keep, keep the conversation open.

              Though with that being said, we also constantly find ourselves having to explain how certain budgets just aren't sufficient for particular builds or ideas. Even the most budget of builds, using builders range stuff. At at the end of the day, once all the plans are done, and builder comes back with their quote…guess who gets the blame.


              Anyways, back to the OP. Holy cripe, there's probably a whole bunch of people messing up if there's that much variation involved.

              Looking at the plan, its probably an early 'marketing' drawing that was done before coordination with other consultants (if the others were even engaged at that point in time). Seeing dimensions to centrelines of walls of unknown thickness is always a great sign.

              Not enough allowance for walls / structure early on like those paper thin external balcony walls and the oddly thin bottom party wall would result in all the dimensions creeping in. Then stack on that columns which may have shifted following structural engineering input, then fully built in / flushed out with other walls (like that round column could have been. Then who knows if the slab was even poured correctly, or if the builder / developer opted for some other cost saving measures. Guh…

              Yes it makes me frustrated to see stuff like this.

              • +1 vote

                @Gnilgorf: Cheers for the insight as an architect. The profession has always interested me!

                I think you are right in that the plan that was provided to me was an early representation. My conveyancer has said since the plan has disclaimers regarding dimensions it isn’t as clear cut. And that so long as the total area of the place is within tolerance, they are allowed to adjust internal sizings. But it makes me wonder if developers are allowed to disregard plans, what is stopping them from removing a room all together, so long as the total area of the apartment is the same as in the contract.

                After the architects put together the plan, it feels like the developer can pretty much do what they please without repercussions.

              •  

                @Gnilgorf:

                Even the most budget of builds, using builders range stuff. At at the end of the day, once all the plans are done, and builder comes back with their quote…guess who gets the blame.

                Don't get me started on builders. It isn't like they done a degree in math and went into building for the love of it. In fact if you look at the way most builders approach their work it isn't their work they are interested in. Except the problem of any problems is either heavy objects fall on people's heads or they fall through holes.

                Thanks for the rest of the insight. It really says a lot about the developers and builders. These conversations must have been had behind closed doors and owners never told about it. Shrinking the master bedroom to be smaller than the second bedroom probably points to the (no) common sense nature of these people.

  • +26 votes

    Don't accept that. It is not reasonable to have a room that is 50% smaller. Get a lawyer and ask the developer to rectify or take legal action seeking compensation.

  • +2 votes

    Main bedroom
    Plan (approx) 3.2m x 3.5m
    Actual (approx) 2.3m x 2.9m
    (50% reduction!)

    wt? What are the dimensions of the other bedroom/s if the above is meant to be the main?

    • +5 votes

      That's actually a very good point.
      The second bedroom (it's a 2 bedder), we measured to be 3.28m x 3.28m. Makes perfect sense for the second bedroom to be larger, right…

      •  

        Of course it does …not!

        Is there an ensuite to either/both bedrooms?

        •  

          "Main" bedroom has a bathroom attached, but the plans size that separately.
          Second bedroom does not have a bathroom attached.

          • +6 votes

            @Mr Random: You should include that as part of your argument in terms of ensuite to the shrunken 'main' bedroom just in case they counter with switching which bedroom is now considered the main.

            Good luck!

  • +16 votes

    Is it common to have a timer for inspection?

    • +31 votes

      My guess is that they know things are a bit dodgy. And what better way to have people look over things than to set a timer.
      After constant delays, we were told there can be absolutely no rescheduling for inspection, and a strict 15 minute timeframe. It's ok for them to delay/reschedule though!

      • +36 votes

        This limit may also not be legally valid. I would strongly suggest getting a lawyer involved asap. It cost money but good legal advice is the best option to protect yourself.

        • +1 vote

          Unfortunately most OTP contracts have this condition - I believe their reasoning is based on the practicalities of allowing all purchasers time to inspect in the week prior to settlement. Typically final inspection isn't time limited for an established home. This is mostly true in VIC at least but may vary elsewhere.

          • +6 votes

            @wartortle: I would just not leave until i had finished. What are they going to do?

            •  

              @MrBear: Arrest you for trespassing in your future home!

              •  

                @orangetrain: So in the time it takes for the popo to arrive, you'll probably have finished and/or just then agree to leave. Easy.

      • +2 votes

        Yeah agree there. When I first read the post, it sounded so suspicious.

        Do you happen to know anyone else buying from the same developer? They could be messing with all of you :(

        •  

          imagine being rushed in to accept property ..

      • +1 vote

        Perhaps they know they can resell for more so more it difficult for the first buyers so they cancel their contract.

      • +1 vote

        LOL bugger right off. Take as long as you need. What are they gonna do, call the cops? What a scam.

    •  

      I'm thinking similar.

      I've seen one apartment on a lower level already sell privately for $100k more than what I signed for. Which is why this is a bit of a tough situation for me. Otherwise I'd be glad to get out of the contract and be done with them. First world problems…

      Unfortunately do not know any other buyers of this development.

      • +2 votes

        Google the name of the developer or the property?

        Or…I suppose, stake out the area and talk to anyone who looks unhappy going out.

        But yeah, lawyer/conveyancer first

        •  

          Did a bit of research on the builder and developer back when these apartments were first advertised. Found some nice apartments they had worked on a few years earlier. And had some friends in the industry who said the builder was top notch.

          Stake out time!
          Thanks for the input :)

      •  

        Settle then sell for profit?

      • -4 votes

        you should delete this thread. You've already shown your hand that you'd probably take the hit rather than cancel the contract. If the developer stumble over this thread you've lost your negotiating power, if you do indeed have any.

      •  

        need to think how this will effect your resale down the track, if the rooms are to small will put off many buyers, apartment market is weak atm maybe see what you can get for the price you are paying now, if it's something better try & get out of the contract unless they give you fair compensation that you are happy with

    • +2 votes

      This was going to be my question. Sounds like it might be a thing though from https://www.propertychat.com.au/community/threads/pre-settle... However, an hour seems reasonable, 15 minutes doesn’t seem right to me. Understand you can’t spend all day there measuring for furniture etc but 15 minutes isn’t very long.

      I’d be on the phone to a lawyer tomorrow morning. The rules for OTP in Vic changed in 2019 (I think?) to stop developers doing dodgy sh!t like cancelling the contract and selling for more.

      The thread above mentioned hiring https://handovers.com/ might be worth a try.

      Good luck! Keep us updated.

  • +3 votes

    Which state was this in? Never heard about the timer thing but good to know in advance it's a possibility.

    Those reductions are crazy, definitely follow it up and go over your contractual agreement/terms

    Also check terms of contract for any inspection restrictions

    •  

      Located in Vic

      • +7 votes

        I think being timed to inspect something you purchased counts as duress

      •  

        Which area?

  • +2 votes

    Was the inspection during your lockdown period, are you able to schedule a follow up inspection to ascertain any other faults now that restrictions have lifted (to my knowledge)

    • +11 votes

      We got out of lockdown yesterday. Inspections were delayed till today because of them.
      We have been told that only one inspection will be allowed. And that settlement will not be extended under any circumstances.
      More of a bully tactic in my opinion, after everything I've read up on. Have sent the info onto my conveyancer for advice. Hoping to have this sorted without too much issue.

  • +1 vote

    Did they consult you prior to modifying the plans.
    Did you request any changes to dimensions of over rooms/walls?

    • +1 vote

      Nope, no correspondence. And we weren't allowed to make any changes to the plan when we purchased.

      • +2 votes

        Then it sounds like they haven't built the house you signed the contract for.
        Bit poor of them to not even update you.
        Take em to the cleaners.

        Or at least push for compensation

        • +3 votes

          Agreed.
          I am hoping that in pursuing this, they don't just say, "As you said, this isn't what you signed for so we are pulling out of the voided contract". Then sell it for more.

          Just waiting on my conveyancer to give me more details.
          Thanks for the input!

          • +4 votes

            @Mr Random: Then it'll be a breach of contract by them and i believe you can sue for damages/losses.

            Although this can only be realised losses so maybe rent, home loan interest, lost profits from not receiving the desired house.

          • +4 votes

            @Mr Random: Lawyer here most contracts have clauses in them that limit the claim that you can seek against the Vendor, and if the claim is more than a certain amount/percentage then the Vendor can/may rescind the contract.

            Now certainly you can "sue" the developer/builder/vendor for specific performance (performing the agreed terms of the contract) but generally it's not really worthwhile as they will drag and cause you way too much of a headache, let alone costs.

  • +12 votes

    Probably one of the only times when seeing a lawyer seems like a really good idea.

    • +2 votes

      Better than the ozbargain legal team?

      •  

        c'mon this is ozb, we believe everything anyone posts here.

        Tell me you made 40mil trading tuna cans and i'll believe you!

  • +8 votes

    Are you positive you measured correctly? Surely not even the dodgiest builder would make a master bedroom only 2.3m wide. That's more like a study!

    •  

      Yeah this is the question that needs to be asked. That bedroom size does not sound right at all!

  • +2 votes

    It’s probably too late now, but I highly recommend using an external company to do your PCI.

    I used one for my house build and they pick up all sorts of things (that relate to building codes) that a normal person would never know.

    In this instance it sounds like you should speak to your lawyer or conveyancer?

    • +12 votes

      I was going to do this and stupidly decided not to. Lesson learnt.
      But once the minor changes have been fixed I will be demanding another walkthrough, this time with a professional.

  •  

    Is the overall unit dims and area about right. I think there is probably some fine print about changes with the contract docs being allowed.. They are big changes though

    • +4 votes

      Overall I am uncertain as we were unable to measure everything in time before the builder was telling us our time was up…
      The plan provided does state some variation is expected in the final build, but like you said, they are pretty big changes, and I would argue unreasonable.

      “Dimensions expected to change” - Removes entire unit.

      • +7 votes

        I would also argue that 15 minutes is an unreasonable inspection time. Pretty sure you’re allowed as long as you want as a final inspection.

  • +15 votes

    We were buying an apartment in NSW off the plan many years ago. It came with a car spot. Prior to settlement they changed the plans and the car spot was removed. Apparently the same thing had happened to a number of buyers. I asked my lawyer if we could refuse to settle. He said that the terms of the contract were in the developer's favour and interest would accrue if we did not settle. So we decided to rescind the contract and ask for our deposit back as it was a material change. The agent tried to change our minds but we didn't budge. After about a month, the developer changed the plans and gave us a car spot so we went ahead. YMMV. Good luck!

    • +13 votes

      Glad to hear yours was sorted out. Don’t think I’ll be getting the missing space back in my apartment though haha! But would be open to negotiating.

      •  

        Hopefully they can throw in some other free appliances to soften the loss.

        • +7 votes

          No way would i settle for some appliances after they shaved 4.53 sqm off my bedroom!

          $50K cash minimum.

          • +1 vote

            @DisabledUser385765: 4.5 sqm is actually pretty significant in an apartment given the space constrains.

            •  

              @KaTst3R: That's what i said.

  • +4 votes

    Everyone voting for don't settle - what solution can the developers offer exactly?

    •  

      ^This

      Or at the very least, that one person (at the time of this message) who voted for Bikies. How do I get in touch!

    • +31 votes

      Massive price reduction. That main bedroom is a joke. Then sell and buy something else already existing.

      • +4 votes

        Agreed. That dreadful main bedroom size will make this apartment difficult to sell in the future without a discount on its price.

      •  

        why would the developer come to the table on a massive price reduction if they can cancel the contract and sell the property to someone else?

        •  

          They've signed a contract with op, though no doubt it's in the contractors favour.

          Would be interesting to know the bedroom dimensions of the unit that sold for $100k more, if the same as ops, path of least resistance may be to simply settle and then sell, pocket the profit. Sucks that the developer gets away with it though, but it will continue to happen while people pay money for off the plan apartments.

        •  

          How can they cancel the contract without penalty?

          Haven't OP got damages from them not honouring the contract?

          •  

            @orangetrain: What are OP's damages?

            • -1 vote

              @dinna89: OP can ask for deposit and plus average price of units of plan size - average price of units of current size as damages.

              So, say 50k + 500k - 400k = 150k.

              Otherwise these developers can return 50k and sell at 400k. Lets say it cost 300k to build.

              With op just accepting. Developer gets 550k - 300k = 250k with very happy shareholders. OP's investment value is down 100k. Developer 250k vs -100k Op

              Without damages but return deposit, the developer would get 400k - 300k = 100k nice! Lovely interest free loan from Op but almost got OP sucked in. Developer 100k vs 50k Op.

              With damages, its 0 with angry shareholders. But apartment buyer demand goes up due to confidence in justice. Developer 0k vs 150k Op.

              IANAL

      •  

        OP has already said the bank has valued it more, obviously based on the size but there's a chance OP could already be paying market price?

    • -1 vote

      Find similar unit sizes and prices sold for them for
      - original size on plan
      - current size in area

      What (OP paid OR original unit size prices, whichever is higher) - other (current size) unit prices = minimum price reduction.

      Maffs!

      IANAL. Get a lawyer ASAP. Wtf.

  • +3 votes

    "Plan (approx) 3.2m x 3.5m
    Actual (approx) 2.3m x 2.9m"
    That alone should make the alarm bells go off!
    Since 2018 had the developer notified you of any changes to the original plan?
    If the developer offers no solution (doubt they will) then lawer up.. $$$$

  •  

    You can't rely on measurements taken by hand inside the unit. The proper room dimensions will include the full width of any external walls and half the width of internal walls.

    Not sure if Vic registered strata plans would have the dimensions of the individual rooms on them? If not, hopefully your solicitor should be able to obtain or request these plans.

    •  

      Which on a 3.5x3.2m room would explain (in an absolutely diabolically worst case scenario 3x3m inside space.

      Not including any built ins of course.

  • +1 vote

    (Developer from hell I think?)

    Have you checked them on the register? https://www.vba.vic.gov.au/tools/prosecution-register

    • +1 vote

      Thanks for the link. Nothing seems to be registered for this particular builder and developer.

  • +1 vote

    If the apartment on a lower level sold for $100K over purchase price imagine what your maybe worth if it was built to original specs. Lawyer up for sure!

  • +7 votes

    Don't sign, let your solicitor know. You're literally paying them to act on your behalf and potentially advise you regarding all legal matters of purchasing, not just for clicking some buttons on PEXA.

  • +4 votes

    Why do they only allow 15 minutes to check it over? Bastards.

  • -2 votes

    Sometimes they give you a longer car space or bigger storage cage to make up the % lost in the apartment.

    •  

      Ha! There may have been a single developer in the history of time that may have had some modicum of decency, but those days are long gone sadly. OP got shafted, and badly.

  • +5 votes

    This post pisses me off - for you.
    Admittedly I'm someone who gets frustrated when the menu says heirloom tomatoes and I get regular tomatoes….
    Your home is the most expensive purchase of your life and developers are still happy to treat it like its no big deal. They probably screw dozens of people everyday with this garbage.
    Hopefully they didn't skimp on following the building regs too.

    •  

      property developers are the same guys who used to drive around in white vans flogging shitty stereo speakers, just older.

  • +2 votes

    What was the name of the developer. Looking into purchasing myself

  • +2 votes

    Have you had a chat with the ACCC?
    Also, there is a website called HomeOne forums for people building houses in Australia. You may even find someone with the same builder/same issue that can offer some experienced guidance.

    Good luck. Keep us updated.

    • +1 vote

      Haven't taken the ACCC route yet, just waiting on some feedback from conveyancer.
      Will check HomeOne and see what I can find. Thanks!

  •  

    just a curious question.

    wha direction does the balcony face? north,?

    •  

      North-East facing.