The dreaded ‘no CCC issued’ is an all too common sight in LIM reports. Often it seems that building consent was applied for, all of the work was done (and inspections completed), but for whatever reason, the final Code Compliance Certificate was never applied for. Now, years down the track, you’re trying to sell the house. What now? What does it mean in practice when there’s no CCC?
Let’s start with what a CCC is. A Code Compliance Certificate is a formal statement from an authority such as a Council under the Building Act 2004 which confirms that all building work carried out under a building consent is complete, complies with the terms of that building consent, and meets the building code. A list of all the building consents issued for a property, and whether a CCC was issued, will be in the Council records for each property (and therefore form a section of all LIM reports issued).
The problem is, even if the building work was done perfectly, without this certification a potential purchaser may not be able to get insurance or finance for the property. This is because the bank and insurer is relying on the Council inspectors to do quality control for them. Whether the purchaser can get insurance and finance or not will depend on the extent of work covered by the outstanding building consent and sometimes it will be tougher for purchasers with smaller deposits.
So, what should an owner of such a property do if this issue is discovered while selling their property? Well, firstly, this will need to be disclosed to potential purchasers, especially because, as mentioned above, it can affect buyers’ ability to get insurance and finance. Secondly, you need to work out whether the outstanding CCC relates to a building consent granted to the current owner or to a previous owner (this is relevant for the warranties in the sale and purchase agreement). The next thing is to contact the Council to see how much of the process was completed and what needs to be done to get the CCC issued. Often the Council will need to come and do a site visit.
Sometimes to get the CCC issued, minor works are required. Other times, major construction can be required. Vendors will need to decide whether they are willing to complete this work, or if they will be leaving this up to the purchaser.
If building work was done without even applying for building consent, you cannot apply for consent retrospectively. You will instead need to apply to Council for a Certificate of Acceptance. This is a limited assurance from the Council that they have inspected the building work, and that it appears to comply with the building code.
What can throw a spanner in the works is if building consent was applied for, but consent is now so old that a Council is unwilling to issue a CCC. You may be able to convince the Council to issue a CCC with a shorter durability period, but sometimes they refuse to issue a CCC as it is no longer possible to confirm whether the work was done in accordance with the consent and code. In this situation you’ll be stuck between a rock and a hard place, as unfortunately you won’t be able to apply for a Certificate of Acceptance either (except, in the rare case that a non-council accredited building consent authority granted the original consent).
If you think you’re going to have issues with building work, it’s best to get the vendor’s lawyer and the Council on the phone as soon as possible, as the more time you have to deal with the issue, the lower your blood pressure will be at the end! If you have any questions about selling a house without a Code Compliance Certificate, feel free to get in touch.
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