Legal Risk Warning

Unconsented Building Works

Unconsented building modifications are one of the most common title defects in New Zealand real estate. Under the Building Act 2004, carrying out structural, plumbing, or major drainage works without a consent is illegal and leaves a lasting liability on the property.

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The Previous Owner Loophole

Clause 7 of the standard ADLS Sale and Purchase Agreement contains vendor warranties. The seller warrants that any works *they* completed were consented and have a Code Compliance Certificate (CCC).

The Trap: This warranty does **not** cover works completed by previous owners. If a previous owner did an unconsented kitchen or extension, the seller has no liability, and you inherit the defect.

1. Mortgage Rejections

Banks refuse to advance mortgage loans on properties with significant unconsented modifications (such as garage conversions, sleepouts, or load-bearing wall removals). Lenders require a clean, fully consented title before settlement.

Bank lending blocked

2. Insurance Exclusions

House insurance policies exclude damage caused by or related to unconsented modifications. If a fire starts in an unconsented kitchen or a load-bearing wall collapses, the insurer will deny the entire claim.

Insurance coverage denied

3. Council Enforcement

Local councils can issue a formal **Notice to Fix** to the current owner, ordering them to rectify the works or demolish the structure. Failures to comply result in substantial fines and notices registered on the property file.

Demolition orders possible

Retrospective Approvals: COA & Safe & Sanitary

1. Certificate of Acceptance (COA)

For unconsented works completed **after 1 July 1992** (under the modern Building Act framework), the owner can apply retrospectively for a **Certificate of Acceptance** (COA) from the local council:

- **Physical Inspection**: Council will not issue a COA without a thorough audit. They often require walls to be cut open so inspectors can view electrical wiring and plumbing cavities.
- **Engineering Sign-off**: You must hire registered engineers to inspect and certify the foundations and structural beams.
- **Cost**: The application and engineering reports normally cost between $5,000 and $15,000, with no guarantee of council approval.

2. Safe & Sanitary Reports

For unconsented works completed **prior to 1 July 1992** (before the Building Act 2004 established retrospective COA rules), a COA is not available. Instead, the owner must obtain a **Safe & Sanitary Report**:

This report is prepared by a private, qualified building surveyor. If they certify that the alterations are safe and sanitary, the report is submitted to the council to be placed on the property's public record file.

While this does not formally consent the works, it provides proof to banks and insurers that the structure is safe, helping to secure mortgages and insurance.

Exempt Works (Schedule 1) & Deleting Warranties

Exempt Building Works (Schedule 1)

Not all modifications require a building consent. Schedule 1 of the Building Act 2004 lists exempt works that can be completed legally without council permission:

Modification Type

Exempt Standard (No Consent)

Decks & Platforms

Under 1.5 metres high above ground level.

Sleepouts & Sheds

Under 30 square metres, with **no plumbing or kitchen fittings**.

Retaining Walls

Retaining less than 1.5 metres of soil.

Internal Plumbing

Replacing existing fixtures (basins, toilets) in the same position.

*Note: Adding a new toilet or shower where none existed before always requires a building consent.*

Deleting Clause 7 Warranties for Sellers

If you are selling a property that contains known unconsented modifications (such as a garage converted into a bedroom by you or a previous owner), you must protect yourself from future lawsuits.

**The Legal Fix**: We draft a custom further term of sale that explicitly deletes the standard Clause 7 warranties. The clause will state:

"The purchaser acknowledges that the garage conversion was completed without a building consent. The purchaser agrees that the vendor's warranties in Clause 7 are deleted in respect of these works, and the purchaser accepts the property in its current state."

This disclosure shifts the legal liability completely to the buyer, preventing them from suing you for building defaults after settlement.

Instruct Quay Law to Vet Your Property File

Do not sign contract disclosures or agreements without experienced property lawyers. We audit council records to identify unconsented alterations. Request a quote today.

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Unconsented Works FAQs

Yes. There is no law in New Zealand that prevents the sale of a property with unconsented works. However, you must disclose the issues to the buyer and explicitly delete the standard vendor warranties in the contract. If you fail to disclose unconsented works you completed, the buyer can sue you for breach of contract.

No. Toka Tū Ake EQC natural disaster cover generally excludes structures built without required building consents. If a landslide or earthquake damages an unconsented sleepout or retaining wall, you will not receive EQC compensation for that portion of the property.

This is a matter of commercial negotiation between the parties. If unconsented works are discovered during the buyer's due diligence window, the buyer can demand that the seller apply and pay for the COA prior to settlement. Alternatively, the buyer can negotiate a discount on the purchase price and apply for the COA themselves after taking possession.

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