Selling a property with unconsented works can be a challenge and this applied when there have been renovations or modifications completed without having first obtained consent from the Auckland Council. However, before you start getting worried, please know there are a number of exemptions permitted or allowed for within the Building Act (You can learn more about these from these links Auckland Council Building Work for Which You Dont Need Consent and New Building Consent Exemptions) these are generally minor additions and other simple items, but overall, it always pays to consult with your Council before you do any work to see whether or not it may be exempt.
Prior to 1991, all building works required a Building Permit from the relevent Council. (This would have been prior to the 2010 Auckland City Amalgamation and therefore the records would have been with the previous Council for the relevant area of the City) Since 1991, all building work required a Consent, and whilst a Consent may have been issued to undertake the work, whether or not the work was signed off that all building work was completed in accordance with the building consent issued by the Council, would have resulted in a CCC (Code Compliance Certificate) being ultimately issued.
If, however, you own a property that has had work undertaken on it that wouldn’t be exempt and has also been done without the proper Permits or Consents, below are some tips and guidance for sellers to help navigate this process.
1. Be Transparent About Unconsented Work
Honesty is crucial when selling a property with unconsented work. Buyers are increasingly savvy, and many will seek full disclosure during the purchase process. If any renovations or building work was done without consent, it’s essential to be upfront about it from the beginning.
Hiding this information may result in legal issues later or the sale falling through during the due diligence phase. Transparency builds trust and ensures a smoother negotiation process.
2. Obtain a Building Report
In many cases, obtaining a building report can help clarify the scope and quality of any unconsented work.
A qualified building inspector can assess whether the modifications comply with the Building Code, even though they were not consented by Auckland Council, this report can reassure buyers that the work, though unconsented, is of a safe and acceptable standard. It’s a valuable tool to address potential buyer concerns.
Nevertheless, a building report stating the unconsented work is safe and compliant, can still create problems, particularly with respect to obtaining mortgage finance through a bank and also with respect to obtaining insurance if left unaddressed..
3. Apply for a Certificate of Acceptance
One of the most effective ways to address unconsented work is to apply for a Certificate of Acceptance (COA) from the Auckland Council.
A COA is issued for work that has been done without the necessary consents, as long as the work meets current Building Code requirements of today. Although it is not a substitute for a proper building consent, it can provide buyers with peace of mind that the work has been assessed by the Council and deemed safe and compliant.
However, the COA process can take time and may involve costs, so it is wise to start early if you plan to go this route.
4. Understand the Impact on Market Value
Unconsented work can potentially affect your property’s market value.
Buyers may perceive a higher risk due to the unknown quality of the work or potential future issues with Auckland Council. It may limit the pool of buyers willing (or able) to take on a property with legal ambiguities, and some may factor this into their offer price, resulting in lower offers.
Consulting with a real estate agent who understands the local market is critical. They can provide advice on how the unconsented work may influence buyer behavior and adjust your pricing strategy accordingly.
5. Offer Buyers Options
To mitigate concerns about unconsented work, you could offer buyers options to reduce their risk. One common solution is to lower the asking price or provide a discount to cover the cost of rectifying or legalizing the work after the sale or by settlement date.
Alternatively, you could offer to undertake the consent process or apply for a COA before the sale goes through. This approach can make the property more attractive to buyers who may be wary of taking on these responsibilities themselves.
Another option is to include an acknowledgement clause within the Sale and Purchase document that highlights the unconsented works to the buyer and depending on the extent of the unconsented works, if its at all possible, the vendor/seller can provide an undertaking that the items will be removed (and made good) by the settlement date. Providing this type of undertaking invariably provides confidence to banks to lend on the property.
6. Legal Considerations
Consult a property lawyer to understand your obligations and any potential liabilities related to the unconsented work. In New Zealand, it’s illegal to misrepresent the condition of a property and by involving a lawyer, you can ensure that your sale agreement includes the necessary clauses to protect you and the buyer from future legal disputes.
Legal advice is particularly important if there’s a chance that the work could lead to enforcement action by the Council.
Conclusion
Selling a property with unconsented work in the Auckland City area doesn’t have to be a major obstacle.
With transparency, preparation, and a clear strategy, you can minimize risks and find the right buyer. Be proactive about addressing buyer concerns, and work with professionals to ensure the process is as smooth as possible.