Buying a property with unconsented works
Building work must meet the standards set out in the Building Act 2004 and the building code. Under the current system, there is a two-step process to have your proposed building work consented and signed off:
- You must apply to your local council for building consent; and
- The consenting council must inspect the work in order to issue a code of compliance certificate (CCC) confirming that the work has been completed in compliance with the building code.
If you fail to obtain the proper consent and the CCC then your building work is unconsented which leads to significant issues when you come to sell your property. Some banks will not lend to buyers of properties that have unconsented work.
What is most important is to check with your insurer to confirm you can get insurance cover before you sign the agreement. A condition of most, if not all, mortgages is that you keep the property fully insured. If your home has unconsented works, some insurance policies will not cover the unconsented area and some will not cover any damage where, for example, a fire originates in the unconsented area, even if the fire spreads to a consented area. In extreme cases, unconsented works could void your cover entirely.
For some situations, there is a process available to obtain a certificate of acceptance which is the council signing off on your unconsented building work. The process to obtain such a certificate changes from council to council. It may also not be available if too much time has elapsed.
It is important to do your due diligence, so you know what you are buying before you sign the agreement.
If you need any guidance on this, please talk with us.
Body corporate rules beefed up
The Unit Titles (Strengthening Body Corporate Governance and Other Matters) Amendment Act 2022 became law on 9 May 2022.
The purpose of the amendments is to:
- Improve the information which sellers must provide to buyers of unit title properties. To help sellers in providing information, bodies corporate now have a duty to retain records and make information available to owners for the purpose of disclosure;
- Strengthen the governance arrangements for bodies corporate, which include expressly permitting committee members to attend a body corporate meeting by audio or audiovisual link, specifying that a quorum is met if owners holding 25% or more of the principal units are present (provided that, where there are two or more owners there is a minimum of two owners present for each meeting) and allowing committee members to vote electronically;
- Increase the professionalism and standards of body corporate managers by introducing a mandatory code of conduct; and
- Ensure long-term maintenance planning and funding is adequate, and provide the ability to establish separate utility interests for different expenses. For example, if there are two units in a single storey development and one unit has twice the ground coverage of the other unit, then a separate utility interest could be established so the bigger unit pays for two thirds of the roofing costs.
The changes will come into effect on 9 May 2024 unless an Order in Council is issued to bring some of the changes in earlier.
Victims of domestic violence can terminate tenancies
Changes to the Residential Tenancies Act 1986 (RTA) came into force on 11 August 2021 allowing a tenant to terminate their fixed term or periodic tenancy if they are the victim of a domestic violence incident.
Domestic violence under the RTA has the same definition contained in section 3 of the Domestic Violence Act 1995 and includes physical, sexual and psychological abuse.
If your tenant is a victim of domestic violence, they may exit from their tenancy agreement by giving you (the landlord) two days’ notice. Your tenant needs to provide you with evidence of the domestic violence. It is important that when you receive notice from a tenant in this situation that you treat this with confidentiality and sensitivity, and meet your obligations under the Privacy Act 2020.
If your tenant is part of a group tenancy situation, they must notify the other tenants within two days after the date the tenancy expires. The remaining tenants are entitled to a two-week rent reduction that is calculated using the formula in section 56B of the RTA.
We can help you navigate the process if your tenant gives you notice to terminate the tenancy after a domestic violence incident.
Disclaimer: All the information published in Property Speaking is true and accurate to the best of the author’s knowledge. It should not be substituted for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this newsletter. Views expressed are the views of the authors individually and do not necessarily reflect the view of this firm. Articles appearing in Property Speaking may be reproduced with prior approval from the editor and credit being given to the source.
Content Copyright © NZ LAW Limited, 2022. Editor Adrienne Olsen, e. adrienne@adroite.co.nz p. 029 286 3650
