What you need to know before buying a home with a pre-approved Development Application

Picture this: You’ve found a gorgeous house to buy but know that with a little work it could be so much better. And it comes with an already-approved Development Application attached. It feels like you’ve won the lottery.

But have you? There are definitely advantages. It could unlock some incredible potential for buyers, while cutting out much of the hassle and expense of drawing up a DA themselves and having a council approve it.

Most councils adopt the fees set by the Environmental Planning and Assessment Act so if, for instance, DA works would cost $500,000, the fee would be $1745. To that would be added the architect fees, consultants’ fees, a construction certificate fee and a compliance certificate fee.

Then there is the time factor. The DA process will, for most councils, take between 30 and 100 days.

A four-bedroom, single-level house in Avalon comes with an approved DA to add an extra level with three bedrooms and a bathroom that would provide a stunning panorama of the stretch of water.

“The house was rebuilt in 2016 on the site of an original home,” says sales agent Lara Rowell of Raine & Horne Avalon Palm Beach. “It’s beautiful now but this could really take it to the next level.” She estimates that the DA could add a “good couple of $100,000s on to the value of the property”.

Buyers can modify the existing DAs to some extent if they’re not exactly what they want.

Josh Palmer, a partner at Pikes and Verekers Lawyers, says a Section 96 modification can be lodged as long as the new plan is “substantially the same development”.

There have been lots of court cases, however, trying to determine what exactly that means.

“The message is that there are no hard-and-fast rules,” he says.

Sometimes, a DA consent can suit both buyers and sellers even when they are at first not on the same page, believes architect Shaun Carter of Carter Williamson Architects.

A house in McMahons Point, that Carter drew up plans for a downsizing couple, ended up selling with a DA consent – to a couple wanting to upsize. That “Down Size Up Size House” won a commendation in the 2016 NSW Architecture Award for Small Projects.

Valuer Pierre Dupre of Dupre Property Valuations says every case is different. “Whether an approved DA adds value to the buyer, or seller, depends on the DA, the location, what it’s for, the size of the land and project, and everyone’s intentions and tastes.”

ReaI Estate Institute of Australia national president Adrian Kelly agrees.

“It all depends on what you want from the house and the nature of the DA,” he says “You might really want a granny flat in the backyard, so if the DA is for that, then that’s great.

Three homes to try

Avalon Beach

A home lovingly built by owner-builder Murray Flynn, with interiors by interior designer Alice Flynn, which comes with an approved DA for a second level.

That second storey would mean more space and impressive views from the top of the house.

Lara Rowell of Raine & Horne Avalon Palm Beach has scheduled an April 6 auction, and advises on a $2.25 million price guide.

Bondi Junction

An already extensively renovated terrace with designer lighting and tapware, with DA approval for garaging, an extension, and to re-configure.

Currently a two-bedder, that extension allows added bedrooms to better suit growing families. With no parking available at the property, the garage would also be a welcome addition.

Edward Brown of Belle Property Bondi Junction leads the property to an April 6 auction.

Randwick

A north-east facing cottage near Frenchmans Road cafes and Clovelly village, with DA approval to extend both levels.

The three-bedroom, two-bathroom property surrounded by tropical-style gardens has the green light to add an extra bedroom and bathroom. The home already has an internal laundry.

Haynes Wileman of Phillips Pantzer Donnelley is preparing for an April 6 auction.