Unconsented works: More than just unsafe

When buying a property, one of the biggest issues a purchaser may face is unconsented works. These works can include (but are not limited to) additions and extensions to a dwelling or renovations such as a wet area bathroom. The lack of a Building Consent or the requisite Code of Compliance Certificate (CCC) can impact more than just a purchaser’s peace of mind. The following outlines what a CCC is and the wider implications if building works do not have one.

Building Consents, Code of Compliance Certificates and Building Permits

Since 1992, a CCC has been required to confirm that works undertaken have been completed in accordance with the relevant building consent. Not all building work requires a building consent or CCC, but it is important to seek planning or building advice before committing to any renovations or new builds.

Prior to 1992, building permits were issued by the local government in relation to works undertaken at a property. A building permit certifies that the plans provided to the Council comply with safety standards and the building code at the time. However, it does not mean that a final inspection was undertaken to confirm the works are compliant. In any event, it is recommended that a registered building inspector holding professional indemnity insurance inspect a property especially if the works are under a building permit as these works will now be 30+ years old.

How can you tell works have been undertaken in accordance with the building code?

When undertaking due diligence on a property, we recommend a Land Information Memorandum (LIM) and Project Information Memorandum (PIM) is obtained for legal review. These reports contain information held by Council in relation to a particular property. This will include details on the resource and building consents issued for the property as well as any CCC’s issued in respect of those consents.

If either report indicates that a CCC has not been issued in relation to a consent, then this should be further investigated as to why a CCC was not obtained and if the works were ever undertaken. 

It may also be the case that works were done without any necessary applications to Council which would not be shown on a LIM or PIM. When buying a property, we recommend you engage a building inspector to check if any works have been undertaken that may have required consent. 

Consequences of unconsented works

An obvious consequence of unconsented works is the potential safety or build quality of the works. Without final sign off from Council, there is no confirmation that the works have been undertaken in accordance with building standards which means there is a risk that the works are unsafe or unstable.

Another consequence is that it makes insuring or obtaining finance on the property more difficult. Often insurers will exclude the unconsented works from any claims or refuse to insure the building completely.  Without insurance or if the issues are big enough a lender will not loan funds to complete a purchase. 

Both the risk of the works being unstable and the inability to obtain insurance can impact the value of a property.

My property has unconsented works, what now?

If you already own a property with unconsented works, then a Certificate of Acceptance (CoA) can be obtained. A CoA is a limited assurance from the Council that the unconsented works comply with the Building Code. Obtaining a CoA will involve an inspection by an approved professional and an application to the Council. 

A CoA is not a complete substitute for a CCC but can provide a potential purchaser or insurer with some comfort. However, we recommend you seek advice on any specific circumstances in relation to your property.

If unconsented works are discovered when selling, a purchaser may request that a CoA is obtained prior to settlement. This would put the burden on a vendor to arrange any necessary inspections and applications. If there is a short-term settlement, obtaining a CoA prior to settlement could prove difficult depending on processing times at your local Council.

Conclusion

Unconsented works are potentially not only unsafe but can also impact your ability to purchase or sell a property. It is essential that the building works at a property are reviewed to confirm that they are compliant, and if they are not, advice is sought as to what the next steps are. We recommend that both building and legal advice is sought prior to entering into an agreement so that any issues can be resolved prior to the signing stage.

Haigh Lyon can assist with advice when purchasing a property to make the process simpler. Contact Shaun McGivern on @email or 09 306 0623, or Kane Batchelor on @email or 09 306 0610.