THIS week, I'm going to let you in on some "classified information".
Did you know that without a Certificate of Classification, your commercial premises may not be able to be legally occupied and it may result in your insurance being void?
A Certificate of Classification is issued by a local council or private building certifier for each building permit that has been issued on or after 1 April, 1976.
The certificate is issued once a final inspection of the building work has been performed and proves that the building work complies with all council requirements and building laws at the time.
In addition, if the Certificate of Classification was given on or after July 1, 1997, the certificate must be on display as near as practical to the main entrance of the building.
It is an offence not to display a certificate of classification and not to comply with the restrictions stated on the certificate.
My fictitious client, Victor Lawless, is buying a commercial property from which to operate his business.
He has asked me to review the contract, and I notice that the seller's solicitor had deleted the requirement for the seller to provide Vic with a Certificate of Classification.
When I call to raise this issue with Vic, as expected, Vic is generally unconcerned with not getting 'the crummy piece of paper", until I raised some of the risks with him.
He tells me the property was only built about 15 years ago.
There are a number of issues:
It is possible that the improvements on the land may not be lawfully occupied unless a certificate has issued.
You may be committing an offence - and be subject to a hefty monetary penalty.
If any structures on the property are damaged, for example, by cyclone, flood or fire, they may not be covered by insurance.
A future buyer will, if properly advised, want the Certificate of Classification - this will then become your problem and expense down the track.
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