The $1.85 million Richmond warehouse ‘residence’ at centre of eviction dispute had “longstanding ban” on dwelling use

The $1.85 million luxury Richmond warehouse conversion at the centre of eviction dispute had a “longstanding” prohibition for use as a dwelling, a summary of the Victorian Civil and Administrative Tribunal (VCAT) ruling reveals.

Furthermore, it was marketed and sold as a residence just a few months after the position became “reasonably clear” that there was no existing or prior rights to use it as a dwelling. 

An email sent to Yarra City Council in February 2010 as part of permit application to"allow buildings and works to the roof-top terrace" declared that the site was “'not currently being used as a dwelling', and 'we simply use the site as storage'."

Four months later it was being marketed for sale  as a luxury converted warehouse residence.

The three-level warehouse at 5/11 Northcote Road (pictured below) was acquired by Adam Burgess and Margaret Boshell in November 2010 and occupied from May 2011 until their eviction notice was upheld by VCAT in November last year.

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They are now suing the previous owner Danyul Gleeson, managing director of logistics and supply chain, Transport Works, as well as the real estate agents who marketed the property, Bennison Mackinnon Armadale, and Brian Pacey of Sargeants Conveyancing in Frankston for allegedly failing to advise them they could not live in the warehouse.

The property was marketed as a an “inner city residence that takes the warehouse conversion concept to new levels of style and success” with the ground floor suitable for as a "living, home office, cinema or recreation zone adjacent to secure garaging for two cars" with upstairs "living/dining areas" and a roof top level providing for "ultimate entertaining featuring stunning decking with spectacular views, an accompanying pavilion and fully integrated barbeque, fridge and al fresco kitchen facilities".

"The perfect marriage of style and substance, form and function. Unforgettable!" the listing concluded.

Presiding VCAT deputy president Mark Dwyer said in his summation that "the term ‘Unforgettable’ has perhaps taken on a different meaning for the applicants in this proceeding".

The case dates back to March last year when Burgess and Boshell were ordered to vacate the premises within 60 days by the Yarra City Council after an inspection revealed it was being used unlawfully as a dwelling when it is located in a Business 3 Zone. 

The couple took the matter to the Victorian Civil and Administrative Tribunal (VCAT) in November last year arguing that it was a “‘home occupation office’ and that “occupation of the premises as a residence was ancillary to its dominant use as an ‘office’” but were unsuccessful. 

In a writ seen by News Limited, they allege that “the former owner and real estate agents made false representations that the property could lawfully be used as a home and was being used as such by Mr Gleeson and his family”. 

The writ says that when the couple inspected the property they found the rooms fully furnished and were told by real estate agents the owners lived there and that the property was the best of the complex because the developer had lived in it. 

They are seeking to recover mortgage costs, conveyancing costs, stamp duty, legal costs and the difference in the value of the property as a residence compared to its zoning as a place of business. 

Damages are also being sought against Brian Pacey of Sargeants Conveyancing in Frankston for allegedly failing to advise they could not live in the warehouse. 

A spokesperson for Brian Pacey's office said he would not be commenting. 

Property Observer also sought comment from Bennison Mackinnon Armadale and from Danyul Gleenson, but received no reply at the time of publishing. 

In the summation of his ruling Dwyer said that “a zone control prohibiting use of the land as a dwelling has been one of longstanding”.

He noted that a successful 1999 development application to develop a large warehouse on the land into six warehouse occupancies, included permission for a five-lot subdivision, including unit 5, the property in question.

Importantly, he added: “None of the plans accompanying these permit applications, nor endorsed as part of the permits, show any internal layout of the warehouse occupancies nor was there any indication in these documents that the proposed use of the premises was for anything other than a warehouse. "

He also noted a letter dated December 16 2009 written in response to an application to build a roof-top terrace, which indicated that the “‘the building is currently used as five separate residential units’, and that the proposed works were for private residential use”. 

In the letter, the council “expressed concern that the existing use of the site as a dwelling was a prohibited use in the Business 3 Zone, and sought further information from the then permit applicant as to whether the premises had any existing use rights for ‘accommodation’”. 

The permit applicant responded by email on 24 February 2010 that the site was “not currently being used as a dwelling”, and “we simply use the site as storage”.