Buying without building consent/CCC?

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Hmm, what to write...
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#1640767 26-Sep-2016 15:38

Suckerpunch:

No, consents can't be issued retrospectively but you could get the owner to obtain a certificate of acceptance.

https://www.building.govt.nz/projects-and-consents/sign-off-and-maintenance/completing-your-project/certificate-of-acceptance/

I've seen plenty of these done, basically a structural engineer inspects and writes a report which from the basis of the cert of acceptance. His inspection can be quite extensive and expensive.

Once it is accepted by the council the insurance company will have no problem at all with it, (assuming all is well) they just treat it the same a CCC.

However in the normal course of events the seller would be advised by the Real-estate Agent to get this before putting the property on the market. I have never seen a buyer pay for one.... But I guess in the market that is Auckland.....

Matthew

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#1640823 26-Sep-2016 16:46

mdooher:

Suckerpunch:

No, consents can't be issued retrospectively but you could get the owner to obtain a certificate of acceptance.

https://www.building.govt.nz/projects-and-consents/sign-off-and-maintenance/completing-your-project/certificate-of-acceptance/

I've seen plenty of these done, basically a structural engineer inspects and writes a report which from the basis of the cert of acceptance. His inspection can be quite extensive and expensive.

Once it is accepted by the council the insurance company will have no problem at all with it, (assuming all is well) they just treat it the same a CCC.

However in the normal course of events the seller would be advised by the Real-estate Agent to get this before putting the property on the market. I have never seen a buyer pay for one.... But I guess in the market that is Auckland.....

You would need to get that in writing from the insurance company though, that they would treat a COA the same as a CCC. I was told by mine that they probably wouldn't rebuild something under a claim that didn't have a building consent and CCC, and they weren't sure about COAs. COAs though are a very expensive process, and essentially the council doesn't take responsibility for the work. So if you end up with a leaky building that got COA, the council is unlikely to have any liability. But IANAL, so the OP should discuss all this with their lawyer.

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#1640826 26-Sep-2016 16:58

And, as someone pointed out earlier, if you can't get full 'normal' insurance, you won't be able to get a bank mortgage loan on the property.

Sometimes I just sit and think. Other times I just sit.

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#1640850 26-Sep-2016 17:53

eracode:

And, as someone pointed out earlier, if you can't get full 'normal' insurance, you won't be able to get a bank mortgage loan on the property.

That's assuming the insurance company knows all about it. Many won't if they are not told, as it comes down to disclosure. But not disclosing it could mean bigger problems. So it is something they would want to provide to the insurer in writing, so it is all documented.

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#1640890 26-Sep-2016 19:47

This reminds me of a mortgage I did at Westpac. A couple were buying a second property and I noticed in the signed sale and purchase agreement that the granny flat had a kitchen that was not compliant. Long story short was the mortgage was approved only after we had received confirmation from their insurer, that they were aware of the issue, and would provide cover. They had a clause though that they would not cover the house if damage was caused by the kitchen. I can't believe we approved it. In reality it was only because they had so much equity in the first house.
The unofficial advice was have an electrician disconnect everything immediately then try and get it complied.

Bottom line and should be very careful.

mdooher

Hmm, what to write...
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#1640894 26-Sep-2016 20:01

mudguard: This reminds me of a mortgage I did at Westpac. A couple were buying a second property and I noticed in the signed sale and purchase agreement that the granny flat had a kitchen that was not compliant. Long story short was the mortgage was approved only after we had received confirmation from their insurer, that they were aware of the issue, and would provide cover. They had a clause though that they would not cover the house if damage was caused by the kitchen. I can't believe we approved it. In reality it was only because they had so much equity in the first house.
The unofficial advice was have an electrician disconnect everything immediately then try and get it complied.

Bottom line and should be very careful.

I almost guarantee the place was fully compliant except that the "Kitchen" in the granny flat simply meant the property had two dwellings and so didn't meet planning regs.

In the case we are talking about my experience is a Safe and Sanitary report by a Professional structural engineer is more than enough to satisfy council and therefore any insurance company.

put it this way, who would you trust, some monkey working for the council or an IPNZ Registered Qualified Engineer?

Don't forget, the reason these are done is that the paperwork is applied for after the fact instead of before all the Electrical stuff still requires a separate inspection.

Matthew

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#1640897 26-Sep-2016 20:05

Zeon:

She is getting a building report done now.

I am a lawyer and I wouldn't be comfortable signing a S & P agreement in this situation without consulting a lawyer who is an expert. She needs more than a builder's report and asking on an internet discussion forum about something this major isn't a good idea.

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#1640933 26-Sep-2016 21:13

There was a local builder in Hawkes Bay in court recently who was found to have 31 non-compliant buildings on his property, I kid you not!

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#1640939 26-Sep-2016 21:32

Lastman:

There was a local builder in Hawkes Bay in court recently who was found to have 31 non-compliant buildings on his property, I kid you not!

He built 31 non compliant properties or he has 31 buildings on his land?

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#1641006 26-Sep-2016 23:31

joker97:
How can the "builder" - who presumably knows at least one or two things about building consents, just go ahead and add 4 living areas without permit? I just don't understand ...

It's not actually that hard, I know of several people who have had to spend more on council paperwork to get permission to get work done than it cost to get the work itself done (and one who exhausted their entire building budget on pointless council paperwork, got the consent but couldn't afford to build any more). And it took longer for the paperwork to get sorted than for the building work to get done. So it's not surprising that people are incentivised to bypass the consent process.

Actually now that I think about it, I'm in the same category, it cost me more than twice as much to get the consent as it did to get the work done. Consent took more than six months (and I couldn't get all the work approved because the council decided that the maximum height I could go to was negative 1 metre), work took two weeks to finish. So perhaps a more cynical form of your question would be "Why would anyone put themselves through the insanity of getting a consent if they don't absolutely have to? I just don't understand...".

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#1641008 26-Sep-2016 23:36

The land still has its value no matter what the deal is with the concents for the temporary shack that sits ontop of it.

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#1641014 27-Sep-2016 00:13

neb:
joker97:

How can the "builder" - who presumably knows at least one or two things about building consents, just go ahead and add 4 living areas without permit? I just don't understand ...

It's not actually that hard, I know of several people who have had to spend more on council paperwork to get permission to get work done than it cost to get the work itself done (and one who exhausted their entire building budget on pointless council paperwork, got the consent but couldn't afford to build any more). And it took longer for the paperwork to get sorted than for the building work to get done. So it's not surprising that people are incentivised to bypass the consent process. Actually now that I think about it, I'm in the same category, it cost me more than twice as much to get the consent as it did to get the work done. Consent took more than six months (and I couldn't get all the work approved because the council decided that the maximum height I could go to was negative 1 metre), work took two weeks to finish. So perhaps a more cynical form of your question would be "Why would anyone put themselves through the insanity of getting a consent if they don't absolutely have to? I just don't understand...".

That is often the case, but is no reason not to do it. People usually get more that their money back when they sell anyway.

I believe councils can request any unconsented work to be removed at the owners cost, plus associated costs. Although not sure how often it is enforced. I guess if it is unsafe they will.

Lastman

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#1641066 27-Sep-2016 09:25

joker97:
Lastman:

There was a local builder in Hawkes Bay in court recently who was found to have 31 non-compliant buildings on his property, I kid you not!

He built 31 non compliant properties or he has 31 buildings on his land?

The latter.

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#1641102 27-Sep-2016 10:19

mattwnz:

neb:
joker97:

How can the "builder" - who presumably knows at least one or two things about building consents, just go ahead and add 4 living areas without permit? I just don't understand ...

It's not actually that hard, I know of several people who have had to spend more on council paperwork to get permission to get work done than it cost to get the work itself done (and one who exhausted their entire building budget on pointless council paperwork, got the consent but couldn't afford to build any more). And it took longer for the paperwork to get sorted than for the building work to get done. So it's not surprising that people are incentivised to bypass the consent process. Actually now that I think about it, I'm in the same category, it cost me more than twice as much to get the consent as it did to get the work done. Consent took more than six months (and I couldn't get all the work approved because the council decided that the maximum height I could go to was negative 1 metre), work took two weeks to finish. So perhaps a more cynical form of your question would be "Why would anyone put themselves through the insanity of getting a consent if they don't absolutely have to? I just don't understand...".

That is often the case, but is no reason not to do it. People usually get more that their money back when they sell anyway.

I believe councils can request any unconsented work to be removed at the owners cost, plus associated costs. Although not sure how often it is enforced. I guess if it is unsafe they will.

One can get a "safe and sanitary report" which is what the bank asked for, so I guess the council is unlikely to get you to remove it if you have one of these?

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#1641109 27-Sep-2016 10:30

mattwnz:

I believe councils can request any unconsented work to be removed at the owners cost, plus associated costs. Although not sure how often it is enforced. I guess if it is unsafe they will.

A friend of mine rebuilt a garage into a second (unconsented) house on his large property. Well built, not unsafe.
After a snap inspection (likely brought on by a neighbours anonymous complaint) the council (FNDC) seved him notice requiring its removal or reinstatement to it's original design and purpose.
The very thorough inspection also discovered some unconsented aspects to his original house, - non complying deck, etc which he was required to remove.

He was refused the option of a 'safe and sanitary' type inspection, and attempted to dispute their action in court.
Took a couple of years. He lost. As well as that cost, he was billed fines from the day of their original notice, plus interest. And still had to demolish everything.
He had a small mortgage, lots of equity. Came home soon after to a notice stapled to his door. The bank had passed his mortgage to a legal firm to be foreclosed.

He decided to fight that. You can guess what happened. At the auction (because the consent issues were front and centre) his $800K property sold for half that, and he now has nothing.

I've just had the pleasure of a council "Building Compliance Audit" on my accommodation building.
Even though we'd crossed the t's and dotted the i's on original construction and everything since, there were still issues that came up.
It's like being audited by the IRD. No matter how careful you've been there's always something they don't like..

I personally believe that the whole system's totally over regulated in a knee jerk reaction against a few years of bad design standards and the occasional cowboy.
But I'd be very wary about buying a property where you're potentially up for the cost of demolishing parts of your house.

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