KEY POINTS:
Each week, national law firm Simpson Grierson answers commercial property questions, which can be emailed and headed "prime asset question". This week's question is answered by partner Michael Wood, who can be contacted at michael.wood@simpsongrierson.com
I recently had the misfortune of adding a "leaky building" to my commercial property portfolio. I have discovered substantial damage as a result of moisture ingress. I now want to quickly repair the damage and sell the property to cut my losses. Do I require building consent from the local council or can I just get my builder in to do the work?
Building in New Zealand is controlled under the Building Act 2004 (the BA04). The starting position is that a person who carries out "building work" without a building consent commits an offence which carries significant penalties. Building work is broadly defined to include work for, or in connection with, the construction, alteration, demolition or removal of a building. "To alter" includes to "rebuild, re-erect, repair, enlarge, and extend" a building.
So it is clear that repairs to a leaky building would be an alteration and therefore building work, which requires building consent. However, the BA04 provides that some building works are exempt from the requirement to obtain building consent. The exempt building works include "any lawful repair and maintenance using comparable materials, or replacement with a comparable component or assembly in the same position".
For leaky building repairs to be exempt, they must be "lawful" and carried out using "comparable materials, or replacement with a comparable component or assembly in the same position".
If a repair is to be lawful it must comply with the building code, even if the building did not do so before the repairs. The building code includes requirements for durability and internal moisture. Expert advice would be needed on whether repairs would meet the requirements and this is something you would need to discuss with your building professionals. Where leaky building repairs are required, it is generally where the building has failed to meet the durability and/or internal moisture requirements of the building code.
If repairs are to be "comparable" and therefore meet the second requirement for exemption from the requirement to obtain building consent, they must be made of similar materials and be of similar composition. Their performance in terms of the building code must be as good as that of the originals.
Leaky building repairs often fall into two categories: structural and/or design changes intended to prevent moisture ingress; and replacement of parts of the building that have been damaged through exposure to moisture (this will often involve the use of materials of a more durable composition).
Structural/design repairs will often not involve replacement with a comparable component or assembly in the same position, since the repairs seek to remedy faults in the existing design. Replacement of damaged building components will often involve materials of a different composition, since the existing components have failed. Repairs of these types will generally not be exempt from the requirement to obtain building consent.
The discussion above shows that "comparable" repairs will often not comply with the building code and repairs that comply with the building code will often not be "comparable". Unless both requirements are satisfied, building consent would be required.
While it is for the owner and their builder to decide whether proposed repairs are exempt from the requirement to obtain building consent, we would advise an owner to be extremely cautious in deciding that leaky building repairs complied with the building code. A person who commits an offence by undertaking building works without a building consent is liable to a fine not exceeding $100,000. The low risk and appropriate approach is therefore to consult one of the building control officers at your local council who will be able to provide advice on these matters.
* The information contained in Prime Assets is intended to provide general information in summary form current at the time of printing. The contents do not constitute legal advice and should not be relied on as such. Specialist advice should be sought in particular matters.
