Buying a property? – Building Act 2004 compliance

How should purchasers deal with the issues of Building Act Compliance when building work carried out on the dream home they wish to purchase does not have a Code of Compliance certificate issued by the local council office?

This situation frequently occurs because:

  1. The building work was carried out pre-1992, and the original local authority records are no longer available (eg Hawke’s Bay County Council); or
  2. An enthusiastic home handyman has carried out significant alterations to the property without applying for building consent; or
  3. The work has been carried out by a tradesman who has not followed up at the Council the correct building consent and compliance procedures.

In situation (a), it is recommended that a purchaser at least obtain a building report from a qualified building certifier, so they can be assured that there are no safety and sanitary issues they do not know about.  That report will be useful when the property is on-sold at a later date.  In situations (b) and (c), the Council will not issue a Code of Compliance Certificate but the owner can apply for a Certificate of Acceptance by submitting plans and details of the completed building work with qualified certification that the work has been done to the required building standard.  If the work is not up to that standard, it will need to be remedied by the owner before a Certificate of Acceptance will be issued, and this could be expensive.

The existence of minor, uncertified work, however, does not mean that the property is not saleable or that remedial work needs to be undertaken immediately.  If the Council refuses to issue a Code of Compliance certificate, they may issue a section 95A letter stating reasons why no Code of Compliance has been issued, but stop short of requiring any penalty to be paid or any mandatory building work undertaken.  In this situation, a purchaser will have notice on the Council file that non-compliant work exists and they may choose to proceed with the purchase of the property, having full knowledge of the nature of those non-compliant works.  In situations (b) and (c), the vendor would need to modify the standard warranty provisions of the agreement for sale and purchase, which state that any work carried out by the vendor has required building consents and Compliance certification.

For detailed advice in respect of Building Compliance, contact our property lawyers on 835 3069 or email gjs@slw.co.nz.