{"id":62502,"date":"2024-11-16T12:00:10","date_gmt":"2024-11-16T01:00:10","guid":{"rendered":"http:\/\/propertyupdate.com.au\/?p=62502"},"modified":"2025-01-10T05:30:10","modified_gmt":"2025-01-09T18:30:10","slug":"watch-out-for-illegal-garage-to-bedroom-conversions","status":"publish","type":"post","link":"https:\/\/propertyupdate.com.au\/watch-out-for-illegal-garage-to-bedroom-conversions\/","title":{"rendered":"Watch out for illegal Garage to Bedroom conversions\u00a0"},"content":{"rendered":"

With a trend towards private building certification<\/a> and self-assessed development applications, I\u2019m seeing a growing number of investors and developers cutting corners in the development process, based on the principle of \u2018non-detection\u2019.<\/strong><\/p>\n

That\u2019s because there\u2019s now no council inspector involved in the process and it\u2019s all handled by your professional, so there isn\u2019t much chance of getting caught out by taking a shortcut.<\/p>\n

In a way, this has led to a growing trend by owners of investment properties to simply convert carports into garages, garages into bedrooms and to \u2018fill-in\u2019 areas in circumstances where there was never any chance of getting formal approval to do so.<\/p>\n

So now, as a property investor, you regularly come across houses containing these unlawful conversions.<\/p>\n

\"pencil<\/picture><\/span>

Note: <\/span>They\u2019re immediately detectable when, for example, you walk into what appears to be a media room, but the entry involves a step down into the area which was once a garage.<\/p><\/div><\/div>\n

Likewise, too, when you walk into the fourth \u201cbedroom\u201d and the roof seems a lot lower than the hallway that you just stepped in from.<\/p>\n

These are all tell-tale sign.<\/p>\n

What does this mean for you as an investor?<\/span><\/h2>\n

Can you rent out a property like this and pick up the extra income from the fourth \u201cbedroom\u201d?<\/p>\n

<\/div>What effect does this have on your insurance? What if someone injures themselves by tripping and falling or by colliding with a ceiling fan in full flight?<\/p>\n

What liability do you have as a landlord or owner of such a property?<\/p>\n

A quick call to your insurer will reveal that the unlawful conversion or addition will usually void your policy and result in them refusing to indemnify you for any such claims.<\/p>\n

Case study<\/span><\/h2>\n

Confronted with such a situation an investor client of mine, let\u2019s call her Karen, bought a property where all of the downstairs area in the house had been illegally converted into bedrooms.<\/p>\n

It wasn\u2019t possible to obtain council approval for the conversion now, as the rooms didn\u2019t comply with the minimum height requirements.<\/p>\n

Upstairs contained three bedrooms but the property was so much more attractive to a tenant with the two additional bedrooms downstairs.<\/p>\n

My advice to Karen was that if she bought this property she must ensure that any lease of it contained a clause that was crystal clear about what the tenant was renting for habitable purposes so there could be no comeback against Karen as a landlord, and to preserve her insurance over the property.<\/p>\n