How to avoid being hit by a $200k renovation fine

“Renovation is quite an aggressive property strategy because you’re not sitting and waiting, you’re creating.”

For Ms Barber, education is key first and foremost. By going in without any knowledge whatsoever, she said investors could be running into quite a bit of trouble.

“And so, a lot of mistakes get made, a lot of things get done in the wrong order, a lot of people spend too much, a lot of people don't get the proper planning permits in place because they lack knowledge, simply because we don’t learn this sort of stuff at school,” she said.

“Following that, once you do get educated, I do think you need to spend the right amount of money on your renovation, so a lot of people overcapitalise, they spend way too much money according to their property value. They then don’t make changes to their property that don’t really uplift the value of the property.”

Providing an example, Ms Barber said laundries are essentially money pits and do not add value to the property in the eyes of the bank.

“People will go and do silly things like do floor to ceiling tiling in the laundry which will cost you anywhere between $2,000 to $4,000, all said and done, inclusive, and materials and labour, yet it doesn’t add any value,” she said.

“People make those sorts of mistakes all the time because they don’t have that knowledge of what does truly uplift, what changes uplift the value and which don’t.”

Ms Barber recommended realising knowing when to bring in experts to help with the appropriate renovations, making sure to get multiple quotes and to keep in mind whether the renovations are appropriate to the suburb.

“If it’s a structure renovation, you should be engaging a builder. If it’s a cosmetic [renovation], that’s something you can project manage yourself, but you’ve got to make sure you’re bringing in qualified, licensed tradespeople,” she said.

Fines and grey areas

What happens if you attempt to complete renovations without consulting the right experts and operating within the right regulations? According to Ms Barber, you could be hit by big fines, ranging anywhere from $750 up to $200,000.

“It depends whether you buy your property under your personal name, so if you buy a property under your personal name, the fines will typically be a little bit less,” she said.

“But if you buy a property under a company structure or a trust structure, the fines are likely to be more, so it just depends what the offence is being committed, and whether the property is under your own name or a company name that will determine the actual amount find.”

Knowing what does and what does not incur a fine can be difficult, even for a property educator like Ms Barber. When she attempted to research Queensland’s building regulations, she asked the Queensland Building and Construction Commission (QBCC) what the fines would be if someone performed renovations outside of the established regulations.

“I know for a fact there [are] thousands of renovators in Queensland who are renovating illegally and don't even know it,” Ms Barber said.

“I asked the QBCC, ‘For example, if somebody was to do a renovation, and they don't get proper approvals in place and a ranger comes out to their property and finds that they don't have all the proper approvals in place, what would the fine be?’ And they weren't able to answer that question.

“So, it’s actually very vague. I don’t know of any document that says if you do this, you will be fined this much.

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