Unconsented Building Works
The stigma of unconsented works can create issues for reselling, as potential buyers will not want to take on the risk, writes Mason Reed.
1 March 2021
Recently I was advising a friend of mine looking to enter the Auckland housing market. He was not too familiar with the house buying process, in particular the potential fish hooks associated with purchasing a property which has some building work which is unconsented.
There is a bit to unpack here, and these types of issues/unknowns can be daunting for inexperienced investors and, in particular, first home buyers. Vendors have a requirement now, when selling a house, to inform the real estate agent regarding the extent and nature of any building work they are aware of, which is unconsented. The real estate agent, likewise, is required to declare this information to potential purchasers.
My advice to purchasers, if there is any doubt as to the suitability of recent building work (for example, an extension or a sleepout), is that they firstly ask the real estate agent to confirm that the works have been appropriately consented (make them work for their commission). Purchasers should also obtain the LIM for the property, and also request the property file from council.
You would be surprised what gems are contained within the council property file, so obtaining it is an important part of any due diligence assessment.
Why Is It Important To Ensure The Building Works Are Consented?
Having documentation which indicates that the building work has the appropriate consents and has a Code Compliance Certificate provides purchasers with the assurance that the building work has been appropriately designed, has been constructed in accordance with the design plans and that the works should meet the performance standards of the Building Code.
‘You would be surprised what gems are contained within the property file, so obtaining it is an important part of any due diligence assessment’
If the works have not been subject to scrutiny (which is provided by the consenting process), then there is no guarantee that the building work has been constructed in accordance with the relevant New Zealand Standard Codes of Practice and that works have been undertaken by a suitably experienced tradesman. This introduces risk to the purchaser, because you do not know whether the building works will fail in the future, and if they do, you have limited recourse for remedy (insurance policies normally exclude unconsented building works), and council will not be liable, as they did not issue a consent for the work. The stigma of unconsented works can also create issues for reselling, as potential buyers will not want to take on the risk/uncertainty which comes with purchasing a property with unconsented building works.
Can You Get A Retrospective Building Consent?
You cannot get a retrospective building consent for unconsented works, but you can obtain what is called a Safe and Sanitary certificate for the work, which generally confirms that the work should meet the performance standards of the Building Code.
You will typically need to engage the services of a professional engineering consultancy to prepare a Safe and Sanitary report. Engineers, however, are not advocates (or at least are not supposed to be), and it is possible that they could assess the subject building work and determine that the work has not been undertaken appropriately, which may require remedial works to be undertaken, in order for them to be able to “sign-off” on it.
My advice, if you are contemplating undertaking building works, is to engage a team of competent professionals, starting with the architect/architectural draughtsman, as they should be aware which works will require consent, and will engage engineering consultants (when required). Architects should also have access to good competent builders who they have used before, and are therefore confident in their abilities (you are unlikely to get architects recommending cowboy builders, as it adversely affects their reputation).
If in doubt, my advice would be to apply for a building consent or a building consent exemption from council - that way there is a paper trail for the works and some assurance that the work will meet the performance standards of the Building Code (which is a good thing).