With property prices around the country reaching record highs, many people are looking to relocatable houses as a faster or more cost-effective option than building from scratch.
Done properly, homeowners or investors can get that chocolate-box villa or bungalow set up on the site of their choice for a fraction of the cost of a new-build. However there are a few things people should consider before getting a house on the road.
Making the decision to re-locate
The first step is doing your homework on the piece of land. If it has been recently subdivided then there may be covenants which prevent second-hand homes from being placed on the site. There may also be hidden costs if the proposed site is unsuitable for ordinary timber piles. These things can easily be checked before you purchase the section. Your lawyer can let you know if there are any restrictive covenants and can make sure your purchase is conditional on a geotechnical report. That means you can be satisfied that you won’t have to spend hundreds of thousands on specially engineered foundations.
Choosing a company and a house
As with any industry, the relocatable house sector has some excellent operators and some cowboys. It can be tempting to just go with the company which has the house you want at a low “sticker price”. However, we recommend that clients check for online reviews and references for any operator before they purchase a house from them. A history of hidden costs, delays and dodgy practices can rapidly spoil what looks like a great deal.
Finding the right house is the next step. A careful and experienced operator can often relocate a hundred year old villa without so much as a cracked window. However some houses are simply not suitable for transportation. Obtaining a building report to ensure that the house can survive the journey is essential before you enter into any contract.
The contract
After you’ve done your homework on the land and the house is the most important step (from a legal point of view anyway) – the contract. Many operators in this industry can have very brief/loose contracts which heavily favour the operator. Sometimes there is no written contract at all! In other words, you end up taking all the risk when something goes wrong.
Many operators in this industry can have very brief/loose contracts which heavily favour the operator. Sometimes there is no written contract at all! In other words, you end up taking all the risk when something goes wrong.
House moving contracts should to be clear about what building work is to be done (preferably with a specification), the date it is to be completed, and generally comply with the Building Act.
Sometimes the contracts contain unfair terms about who bears the cost of damage to the house during moving, and will ask you to pay the full amount of the contract price before the building is placed on site. This can be risky for the purchaser if something goes wrong. There are payment options which are fairer for all parties – like payment into an independent trust account to be released at certain stages if the work is done properly.
How can we help?
With a bit of preparation a relocatable home can be a great option. WRMK is experienced in all aspects of property development and construction law. We help clients put themselves in a position to ensure that their relocatable house arrives on time, on budget and reducing the risk of messy disputes. If you are thinking about a relocatable house or want some guidance through any stage of the process, please contact our property development team or your usual WRMK advisor.
Our thanks to Simon Davies-Colley for writing this article.
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