A first home buyer was looking to purchase a property that had recently been renovated.  The vendor told him (via the real estate agent) that none of the work they had carried out on the property needed a building consent. 

One of the things the vendor had done was put blown-in insulation into the exterior walls.  This is a process where holes are made in the house and insulation is blown into the wall cavities.

It turned out, after taking legal advice and speaking to Council, that this insulation did require a building consent as it is deemed to be ‘building work’.

When buying a property, one of the warranties the vendor gives is that if any work they carried out on the property required a building consent, that they obtained one, and obtained a Code Compliance Certificate for that work.

In this situation the purchaser was able to request that the vendor obtain a Certificate of Acceptance for the building work prior to settlement (which is generally the process required if a consent has not been granted, but should have been).  This ended up delaying settlement and was a time-consuming and expensive process for the vendor. 

Had this not been picked up, the purchaser would have had to later obtain the Certificate of Acceptance at their own cost.  It could also have affected their insurance.

For vendors/sellers, it is very important to check with Council before you do any building work, including if you retrofit any insulation into the exterior walls of a property.  Selling a property with building work that does not have consent, and a Code Compliance Certificate issued, is difficult and can lead to a reduction in purchase price, or at worst, the loss of a sale.

For purchasers, it is highly recommended that you have a builder check a property before you buy, to alert you to any work that would have required a building consent. A LIM report from the Council will also show you any building consents that have been issued for the property, and whether a Code Compliance Certificate was issued for those.

Taking legal advice before signing an Agreement to buy or sell a property is vital, to make sure issues like this are flagged.