Hidden cost nightmare !

People considering buying an older home property in Sydney would be well advised to make enquiries about the connection of water, gas and sewage to the property.   Property owners are responsible for the connection to the mains and in about ten percent of instances, this occurs well outside the property boundaries - and sometimes the connection is under busy suburban roads.

Most people cheerfully accept responsibility for the pipes within their property boundaries, but damage outside can be caused by many unrelated factors.   If a contractor damages a pipe and it is part of the connection between the property and the main - the cost of repairs is borne by the property owner - and that can run into many thousands of dollars. Proving the negligence of others can be a difficult and costly undertaking.   Even pin pointing how the damage occurred may involve costly litigation.

There is added input from councils who demand that repairs be done within a twenty-one day time frame, and this carries the threat of a $ 20,000 fine for non compliance, and most home insurance policies stipulate that the cover they provide ends at the property boundary.

Intending buyers usually carry out property searches, but rarely is service connections part of that agenda.  This information should be readily available from council records, but in the case of properties dating back to an earlier period, record keeping was not as meticulous as it is today, and in some cases council amalgamations have resulted in earlier records becoming unavailable.   In such cases, a new owner is taking on all the risks involved in that property purchase.

This problem may be exacerbated by the coming connections to the NBN.    Laying cable to bring high speed broadband to suburban homes will involve a new trench outside property boundaries and the involvement of heavy machinery may damage old piping subjected to years of corrosion.   The outcome could be a sudden and very unexpected bill for a lot of unplanned money.   Something that could be a threat to the solvency of the average family.

There is no easy answer to this problem, but at least it needs to be taken into account when considering an older property.   It is certainly something that property search companies should investigate.   The risk of council plans not showing a service connection outside the property would be an event that could be covered by insurance that would enhance the company image in presenting it's policies to the public.

In this competitive world, it is the company that thinks and acts outside the nine dots that gets the business !