Selling a house with unconsented work

It has to be disclosed

Sellers confirm that the property has the necessary consents and code compliance certificates for building work, and must disclose outstanding consents to the agent or the buyer. Work you know is unconsented is a known defect for these purposes, and once your agent knows about it, buyers are told.

The government's guidance at settled.govt.nz says sellers should share all relevant information, including issues such as water tightness issues, boundary issues and unconsented alterations, and that failing to disclose serious issues can lead to legal action later.

The rules that bind an agent on disclosure, and what happens if a client asks for something to be withheld, are set out on what do I have to tell buyers about my house.

What the council file will and will not show

The property file held by the council is the starting point. It shows what consents were applied for and granted, the inspection records, and whether a code compliance certificate was issued. Order it before the property is listed rather than after an offer arrives.

What it will not show is work nobody ever told the council about, so a gap in the file is not proof that nothing was done. It also says nothing about whether the work is sound, which is a separate question. A building inspector or a licensed building practitioner is the person to answer that one.

A certificate of acceptance is the mechanism councils have for building work that was done without a consent. Whether one is available for your work, what the council would want to see, and what it would and would not cover are questions for the council itself, and the answer turns on what the work is and when it was done.

How it is put to buyers

Plainly, in writing, and early. A file holding the council records, an inspection report and a written description of exactly what is and is not consented lets a buyer price the real issue rather than the worst one they can imagine.

Buyers price uncertainty harshly, and banks and insurers ask the same questions, so vagueness costs more than the fact usually does.

What it changes about the campaign

Expect buyers to want more time and more conditions: a builder's report, the council file, finance and insurance, and in some cases their own enquiry to the council. A buyer who needs a bank and an insurer to agree is more troubled by it than a buyer who does not.

Disclosed up front it is a negotiation about price and conditions. Found late by a buyer's lawyer, it is usually the end of the deal, and the next buyer hears about it anyway.