Unconsented Works: A Buyer’s Guide

Purchasing a property is a significant investment. Yet, amidst the excitement of acquiring a new home, buyers sometimes overlook ensuring all building works on the property have the necessary approvals.

Unconsented or unapproved works can range from minor modifications to substantial renovations. These might seem harmless, but they can have severe repercussions in terms of legal, financial and safety issues. Unapproved work can complicate insurance claims, reduce the property’s resale value and make securing mortgage finance more difficult. In some cases, you may be required to undertake costly remedial work to bring the property up to code.
Ensuring that any alterations or additions have the requisite building consents is essential to protect your investment and peace of mind.

How to Verify Property Approvals

To safeguard against the potential pitfalls of unconsented works, it is crucial to conduct thorough due diligence before purchasing a property. The first step is to obtain a Land Information Memorandum (LIM) report. This document, provided by the local council, contains a summary of all the records they hold relating the property. The LIM report will indicate whether building permits or consents have been issued for any work done on the property and whether code compliance certificates have been granted.

Most councils will also make available a copy of its file for the property, which includes copies of building consents, permits, plans and certificates related to the address.

Engaging a qualified building inspector to assess the property is also advisable. An inspector can identify any unconsented works that may not be immediately apparent and advise on the potential implications.

What requires approval?

The type of approvals required for building work varies depending on the nature and extent of the work. The Building Act 2004 governs all building works in New Zealand, and most work requires a building consent from the local council to ensure it meets the building code’s requirements. Common examples of work that typically require a building consent include:

• Plumbing, electrical and drainage work
• Structural alterations (such as removing load-bearing walls)
• Significant additions like extra rooms or extensions
• Fireplaces and heating systems

Some minor works are exempt from requiring a building consent under Schedule 1 of the Building Act. These exemptions generally cover low-risk work. However, even if work is exempt from requiring a building consent, it must still comply with the relevant sections of the building code.

Permits versus Consents

For older properties, the type of documentation required for building work differs significantly from newer properties.
Before 1 July 1992, building work required a Building Permit. These permits did not require the equivalent code compliance certificates. It is not uncommon records for very old properties to be minimal or incomplete.

Because older properties did not require the same kind of oversight, people routinely buy and sell them without much regard for records that have been lost or never existed in the first place. However, it is important to check these older properties for newer improvements or additions that may have required consent. A new fireplace in an old house will have required approval.

After the implementation of the Building Act 1991, which came into effect on 1 July 1992, building work required a Building Consent. Once the work was completed, a Code Compliance Certificate (CCC) was issued to confirm that the work complied with the building code. This change was designed to ensure higher standards of safety and quality in building works.

Options for Dealing with Unapproved Work

Discovering that a property you wish to buy has unapproved work can be disheartening, but it’s not necessarily a deal-breaker. Several options can help you navigate this situation.

• Negotiate with the Seller: If unconsented work is identified, you can negotiate with the seller to rectify the issues before the sale is completed. This might involve the seller applying for a Certificate of Acceptance from the council, which confirms that the work complies with the building code. However, this can be a lengthy and sometimes costly process.
• Price Adjustment: Another option is to negotiate a price reduction to account for the cost and effort required to obtain the necessary consents or to undertake remedial work. This approach requires a clear understanding of the potential costs involved, so obtaining quotes from qualified professionals is advisable.
• Apply for a Certificate of Acceptance: In some cases, it might be possible to apply for a Certificate of Acceptance from the council. This involves the council inspecting the work to ensure it meets current building code standards. If the work complies, the council may issue the certificate, providing some assurance that the work is safe and legal. It is important to note that this option is only available for work completed after 1992, as building codes were not in place before that date.

Should I go ahead?

Thousands of homes in New Zealand have undergone some degree of work without the requisite approvals and home buyers accept this risk every day. People will often take the risk if the works are of a nature that, in the worst case scenario, could be easily removed. Even in this scenario, it is crucial to disclose this to your insurer and bank before proceeding.

Ultimately, if unconsented work poses significant safety risks or if the cost of bringing the property up to code is prohibitive, it may be wise to reconsider the purchase. While it can be disappointing to walk away from a property, doing so may save you from future headaches and financial burden.