Council Errors Leave Homebuyer High and Dry

The case of Peter Mistrevski, who paid $2.1 million for a historic Newtown electricity substation, highlights the risks faced by property buyers when relying on official documents. Mistrevski’s local council issued an incorrect planning certificate, which stated that the property was not a heritage item and could be redeveloped without a full development application.

This trend of decommissioned substations becoming redevelopment opportunities in Sydney’s land-constrained areas has led to prices exceeding $2 million for small sites, despite the complexities involved. Mistrevski obtained the planning certificate from Inner West Council in March 2025, which was combined with advice from his lawyer, architect, and town planner to lead him believe he had found a rare opportunity.

However, shortly after contracts were signed, a second planning certificate issued by the council in October 2025 identified the property as a heritage-listed building within a conservation area. This new information halted Mistrevski’s proposed development plans and plunged the site into uncertainty, with holding fees of $12,000 per month while an independent valuation put the property at $1.3 million – $800,000 below its purchase price.

The dispute has raised concerns about the accuracy of official planning documents and the risks faced by buyers who rely on them. Mistrevski’s compensation claim against the council is a testament to the financial losses he has incurred due to the council’s mistake, including reduced property value and lost development opportunities.

Inner West Council maintains that it is committed to balancing housing needs with protecting heritage, but this incident highlights the need for greater transparency and accountability in the planning process. As Mistrevski notes, buyers should be able to have confidence in the accuracy of official documents before making major commitments.

This case has significant implications for property development in Sydney’s inner west. A single error can result in substantial financial losses, raising questions about the reliability of official information and the need for more robust quality control measures within councils. In an era where property prices are skyrocketing, buyers rely increasingly on official documents to inform their decisions.

It is imperative that these documents are accurate and reliable, lest we risk creating a market where buyers must navigate labyrinthine planning processes or face financial ruin due to council errors. The dispute will be closely watched as Inner West Council addresses concerns and takes steps to prevent similar incidents in the future.