Local Government Approval in Western Australia: Unpacking Your REIWA Contract Obligations

1. Plain English Definition

Local Government Approval means the necessary permissions and consents required from your local council (e.g., City of Perth, City of Fremantle) for certain aspects of a property, such as renovations, extensions, changes of use, or even the legality of existing structures. In a Western Australia property contract, this clause ensures that the property, or your intended use of it, complies with local planning schemes and building regulations. It's crucial for buyers to understand if their plans for the property align with what the local government permits, as non-compliance can have serious consequences.

2. The Danger Zone: Buyer's Risk

• Lack of Due Diligence: Failing to check if existing structures (e.g., patios, sheds, granny flats) have the required Local Government Approval can lead to costly retrospective applications, fines up to tens of thousands of dollars, or even demolition orders from the local council under Western Australian planning laws.
• Intended Use Discrepancy: If you plan to use the property for a specific purpose (e.g., short-stay accommodation, home business) that requires Local Government Approval, and this is not secured before settlement, you could be in breach of local zoning bylaws, risking immediate cessation of activity or significant penalties. This is a major buyer's risk.
• Delay in Settlement: If your REIWA Contract is conditional on obtaining Local Government Approval for a specific development, delays in the council's approval process can push back the settlement date, potentially incurring penalty interest or even leading to the seller terminating the contract if conditions are not met within the stipulated timeframe.
• Unapproved Alterations: Discovering after settlement that previous owners made significant alterations without Local Government Approval can leave you, the new owner, responsible for rectifying the non-compliance, which could involve expensive remedial work or legal fees to appeal council decisions in Western Australia.
• Development Restrictions: For investors, particularly those considering subdivision or multi-unit development, an oversight regarding the property's zoning and the local government's planning scheme can mean the project is unfeasible, resulting in a substantial loss on the initial investment and development costs.
• Increased Costs: Retrospective approvals often involve higher fees, professional consultant costs (e.g., town planners, surveyors), and potential rectification work, significantly inflating the overall cost of your property purchase beyond the agreed price in your Western Australia property contract.

4. Real-Life Western Australia Scenario

Chen, a first-home buyer in Canning Vale, purchased an investment property through a REIWA Contract, intending to convert a large shed into a separate granny flat for rental income. He assumed the existing shed was approved and the conversion would be straightforward. After settlement, when he applied for building permits, he discovered the original shed was built without any Local Government Approval and was too close to the boundary, violating the City of Canning's planning scheme. Chen faced a dilemma: either demolish the unapproved structure at a significant cost or undertake a lengthy and expensive retrospective approval process with no guarantee of success, losing months of potential rental income. The lesson: Always verify existing structures and intended uses with the local council before committing to a Western Australia property contract.