You have just bought a property in Melbourne. The listing mentioned a granny flat out the back. You are settling in, going through the paperwork, and somewhere along the way you discover there is no building permit on record for it. No planning approval. No record with the council at all.
This happens more often than most people realise. And while it is a stressful discovery, it is not necessarily the end of the world. This guide covers what an unapproved granny flat Melbourne means for you, what your options are and how to move forward without making the situation worse.
What Makes a Granny Flat “Unapproved” in Victoria?
A granny flat is considered unapproved — or unpermitted — when it was built without the required permits under the Building Act 1993 (Vic). In Victoria, any new dwelling, including a secondary dwelling, requires at minimum a building permit before construction begins. This permit ensures the structure meets the National Construction Code, energy efficiency standards and local planning requirements.
Some unapproved granny flats in Melbourne were built years or even decades ago, before regulations tightened. Others were constructed recently by owners who either did not know the rules or chose to ignore them. In both cases, the legal and financial risk sits with whoever currently owns the property.
If you have purchased a property with an unapproved structure on the title, that risk now sits with you.
What Are the Risks of an Unapproved Granny Flat?
Understanding the risks clearly is the first step to dealing with them properly.
Insurance complications. Most home and landlord insurers will not cover an unapproved structure. If the granny flat is damaged or causes injury, you may find yourself without cover at exactly the moment you need it most.
Council enforcement. Melbourne councils have the power to issue building notices and orders requiring unapproved structures to be modified or demolished. Enforcement action can be triggered by a complaint from a neighbour, a council inspection or a title search during a future sale.
Selling complications. When you eventually sell, a solicitor or buyer’s conveyancer will likely identify the unapproved structure during due diligence. This can delay settlement, reduce your sale price or cause a buyer to walk away entirely.
Heritage overlay and flood zone complications can compound the situation further if the property also sits within a planning overlay that restricts secondary dwellings.
Strata title restrictions may also apply if the property is part of a subdivision or owners corporation, adding another layer of complexity.
What Are Your Options?
You have three realistic paths forward when dealing with an unapproved granny flat Melbourne.
Option 1: Apply for retrospective approval
In some cases, it is possible to seek retrospective building approval for an existing unpermitted structure. A registered building surveyor will assess whether the structure meets current building standards. If it does, or if it can be brought up to standard with modifications, a certificate of final inspection may be issued.
This process is not guaranteed. Older structures often fall short of current energy efficiency requirements, ceiling heights or structural standards. But it is worth investigating before assuming the worst.
Option 2: Demolish and rebuild to standard
If the existing structure cannot meet current standards, or if the cost of bringing it up to compliance exceeds the value of keeping it, demolishing and rebuilding is often the cleanest solution. A properly permitted G-Flat™ from Innovista gives you a compliant, warrantied structure that protects your property’s value and your insurance position from day one.
Choosing a trusted builder who understands Victorian compliance requirements is critical at this stage. The last thing you want is to invest in a new build that creates the same problem all over again.
Option 3: Seek legal advice before acting
If you purchased the property without being informed of the unapproved structure, you may have recourse against the vendor or their agent under the Sale of Land Act 1962 (Vic). A property solicitor can advise on whether disclosure obligations were met and what remedies may be available to you.
Do not rush into demolition or modification before getting legal advice if you believe the non-disclosure was deliberate.
What Should You Do Right Now?
Do not rent out the unapproved structure. Renting out an unpermitted granny flat in Melbourne exposes you to significant liability if anything goes wrong. Your landlord insurance will almost certainly not cover it.
Do not ignore it. Council enforcement actions can escalate quickly, and an unapproved structure only becomes harder and more expensive to deal with the longer it sits unaddressed.
Get a building surveyor to assess it. A registered building surveyor can give you an honest assessment of whether retrospective approval is viable and what it would involve.
Contact Innovista for a site assessment. If retrospective approval is not viable and a rebuild is the right path forward, our team can assess your block, walk you through our full G-Flat™ range and give you a clear picture of what a compliant rebuild would cost and how long it would take. You can also read what real customers say about Innovista before making any decisions.
Moving Forward With Confidence
An unapproved granny flat Melbourne is a problem — but it is a solvable one. The homeowners who handle it best are the ones who get clear information early, take the right advice and act decisively rather than hoping the issue resolves itself.
Whether you need a retrospective approval pathway or a full rebuild, the starting point is the same: understanding exactly what you are dealing with.