Buyer beware!

Before you buy a secondhand car, you check the engine and look for rust. You ask about the service history and possibly get an AA check done on it.

Yet people buy houses without doing any homework on them.

Property detective work starts with the Land Information Memorandum (LIM). Among other items, a LIM includes permits and building consents that have been issued and identifies if consents have been certified or not. But the LIM displays only information known to the local council. What it doesn't show is unauthorised additions or alterations.

Unauthorised work on a house can potentially affect safety, health, insurance, liability and the bank balance of the person who owns it. All building work that falls under the Building Act needs a Code of Compliance Certificate. This means a building inspector has determined the work is of a safe and adequate standard.

It is a legal requirement to have all work authorised before selling a house and if a buyer checks and finds unauthorised work done to a property, they can request that the seller gain a consent for the work. Otherwise, the buyer may be liable for the cost of the consent process when they eventually sell the property themselves.

A sale and purchase agreement will sign away the responsibility to the new owner so it is a case of buyer beware. That extra bathroom or basement bedroom may appear to add value to the house but if it is unsanitary or rotting, it will end up costing the owner.

Before the Building Act 2004 was introduced in March this year, illegal building work could be authorised by the provision of a Safe and Sanitary report by the property owner to the local council. This involved obtaining a report from a building consultant and in many instances did not require the council to inspect full plans and specifications. A relatively small fee was charged for the inclusion and acceptance of the information on the property file and a letter of acceptance was sent to the property owner.

The Building Act 2004 identifies that work undertaken prior to 1991 can still be legalised by the use of a Safe and Sanitary report but for building work since the introduction of the 2004 Building Act, a new Certificate of Acceptance (COA) has been introduced. The COA is processed in the same way as a normal building consent meaning all plans and specifications are required. If necessary, inspections are undertaken by the council building inspectors and the fees are the same and sometimes more than for a building consent.

Retrospective building sign-off will end up costing as much or more than applying for a building consent before starting the job. Additionally, if the work doesn't adhere to the Building Code you may have to rip it out and start again which will cost more than if you had followed the recommended guidelines to begin with.

The key message for any prospective purchaser is:

Find out if the property matches the files. If not, unauthorised building work may have been undertaken. Request that the current owner apply for a COA for the alterations. Don't get trapped into buying a property then end up paying the fees for a COA when you sell.

If there are concerns, then obtain the services of a building consultant.

Key message for the seller:

Needing to get a COA during the sale process will most likely hold the sale up and that delay could end up costing you in penalty payments or the sale may fall through entirely.

Unauthorised building work can end up costing more than getting a consent in the first place.

Your council's property information centre holds all records on properties and for a small fee you can look at them. Auckland City's plans are on electronic files (this may be different for other councils) so they are easy to find and copy.

For more information about the Building Act, phone Auckland City on 379 2020, or go to www.aucklandcity.govt.nz or the Department of Building and Housing at at www.dbh.govt.nz 

*Bob De Leur is principal building officer with the Auckland City Council.