How our due diligence saved our client $200,000 and unimaginable stress and anxiety!
Steve B asked us to prepare a unit development feasibility study on a 600 sqm corner site in Heidelberg Heights. In order for it to be profitable he indicated that he needed 3 units. Each unit would have 3 bedrooms, the main bedroom with an ensuite. We prepared designs. Together with our planner we presented the designs over the counter at the Banyule Council. We received approval in principle. The client was excited! Knowing he had a good chance of winning at auction, he anticipated a chance to make a nice profit. He could still achieve this even if he paid up to $100,000 above the advertised price.
Council Stormwater Requirements
Our unit development feasibility study includes an application to Council for storm water discharge details. Our competitors generally don’t include this detail. Unfortunately, Council can take up to 15 business days to provide this information. We were only given 7. It was the Friday before the auction. We made our fourth call to Council and were fortunate to get a sympathetic engineer online. He completed the work and emailed it back to us in the afternoon.
Upon inspecting the Stormwater Discharge Information our jaws dropped.
Council required that the proposed stormwater would need discharge to connect to a council pit 200m away!
Our client would have to pay for a new 225mm diameter drain. This would travel some 200m through the backyards of 11 properties. Can you imagine trying to get permission from all these residents and the cost of making good work. It would be an absolute nightmare!
Our builder contacted his plumber and engineer. Wait for it… he was advised that this work would cost $1000 per metre.
That’s right, $200,000!
Not only that, it suggested that if a neighbour did not want to grant access his only recourse would be to go to VCAT. The process could take years!
Unit Development Feasibility Study
You can imagine how grateful the client was. He said, “Danny – you just saved me not only the $200,000 but potentially years of stress and anxiety”.
He indicated, that all his previous architects and designers had never obtained this information. Not even before a building permit, let alone a purchase.
So in fact he said he could have spent a year or so fighting council to obtain a planning permit. He would have paid some $20,000 in costs to get a planning permit. Only then would he have found out about the nightmare that lay ahead!
As you can imagine Steve now never buys a site without due diligence. He engages us to do the proper unit feasibility study for him.