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Tenants & Unrecorded Building Work
Building work that was carried out prior to the 1st July 1992 required a building permit. For work that was completed after this date a building consent was required together with a Code Compliance Certificate for final sign off. Where work has been undertaken that required building consent and no consent was issued then this is deemed illegal building work under the Building Act and is enforceable by a fine of up to $200,000 and/or up to $20,000 per day for each day the offence continues.
For building work that predates the implementation of the 1991 Building Act most councils accept a Third-Party report – also known as a Safe & Sanitary Report which is placed on the property file held at council and records unpermitted or unrecorded building work that was undertaken prior to this era.
Many BCA’s (Building Consent Authorities) have been reasonably slow to enforce the provisions contained within the Building Act, with some councils issuing smaller fines commensurate with illegal minor works, and requiring owners to address the issues. MBIE which stands for the Ministry of Business Innovation & Employment is the Government statutory authority that oversees the licensing and regulation of builders also has the provision to fine, or suspend builder’s licenses under the scheme.
Recently we have observed the Tenancy Tribunal pronounce judgements that directly affect landlords by imposing orders to refund tenants rent where occupants have rented a property with unpermitted or unconsented alterations.
A recent case found that a Dunedin landlord was ordered to pay the tenant Natalie Parry $10,000 in rent she had paid over the previous 29 weeks she had stayed in the property. The tribunal said the tenancy was unlawful because of the unpermitted work and that Perry was entitled to a full refund of all rent paid.
This decision puts the onus on investors to ensure that their properties are lawful and that council documentation should match up to a physical onsite inspection, (unless the work is Exempt Building Works under schedule 1 of the Building Act)
As building inspectors, we find approximately 1 in 5 houses have issues surrounding unpermitted or illegal building work and this often includes:
- Wall removals supporting load, or containing bracing elements
- Added plumbing fixtures
- Conservatories, porches, or covered verandahs larger than 20sq metres in size
- Unauthorised extensions
The inference is that tens of thousands of rental properties throughout New Zealand probably contain unlawful building work and tenants may be entitled to a refund of rent paid to their landlord. A provision in the Residential Tenancies Bill is that rent can be ordered to be repaid is a property is deemed unlawful.
Pre-purchase property inspectors should allow to search council records as part of the service they offer clients prior to confirming the purchase of a property, so that these types of problems don’t come as a surprise later.
At NZ House Surveys we offer Silver & Gold reporting which includes a search of council records as part of our reporting procedure. The message is simple - don’t get caught out later. Have a professional independent inspection company carry out a thorough building inspection, and pay the little extra to have the council records searched and checked.
For those who have already purchased we are able to carry out the Third-Party Reports required to record unpermitted building works prior to 1992. If in doubt give us a call today. Phone 0800 487 884