New South Wales - Illegal Building Works

Claims Chronicles

The Background

In November 2022, settlement took place on Susan Marr’s* dream home, a beautiful, sprawling NSW property that had once been a restaurant.

What happened next?

In July 2023, Susan was sent a Notice from the Council outlining a range of issues around the property’s change of classification from restaurant to residential dwelling. Various additions and alterations had been made, and Susan was required to obtain relevant permits and compliance certificates for the use or development of the land. She then needed to complete the remaining building work for any structures that would be kept, and demolish any building works for structures that wouldn’t be kept. In August 2023, Susan submitted a claim request, along with the Council Notice.

What did we do?

We accepted the claim under our illegal building work coverage. However, due to a Known Risk we applied an exclusion to exclude all matters that had been disclosed in the pre-purchase building inspection report. Having obtained building and plumbing quotes for the required works, which totalled approximately $240,000, we offered Susan the policy maximum for illegal building works ($160,000) as a full and final settlement of the claim. Susan accepted our offer and the claim was finalised.

Payment: $160,000 | Claim Type: Illegal Building Works

*Name has been changed for privacy purposes.