Recent cases highlight importance of consents

Recent reports in the media have highlighted the importance of ensuring that the proper consents are in place before building work begins

Section 40 of the Building Act states that a person must not carry out any building work except in accordance with a building consent; anybody who carries out building work without the appropriate consent commits an offence and is liable to a fine not exceeding $200,000, plus a further $10,000 per day if work continues.

The offence under Section 40 is a strict liability offence, which means that it is not necessary for the prosecution to prove that the defendant intended to commit the offence. Therefore, a naïve homeowner who unwittingly carried out building work without the necessary consent could be held liable.

Onus on builders

Of course, builders who carry out work without a building consent can also be held responsible. Even if a building contract states it is not the builder’s responsibility to obtain the building consent, it is their responsibility to check that any necessary consents have been granted before starting any work.

Recent cases suggest that fines imposed for offences under Section 40 are significantly lower than the statutory maximum. Examples include a fine of $6,000 for undertaking work three weeks before the building consent was obtained and an $8,400 fine for building work on three yurts.

Fines have been larger where the scale of a project has been significant and undertaken for large profits, as professionals are expected to know better.

For professional parties, however, the fallout from failing to ensure compliance with legislative requirements may be much wider. Professional builders who incorrectly advise clients that specific work does not require a consent may face claims for providing negligent advice or, if a LBP, may become subject to a complaint. According to law firm Harkness Henry, other costs could include:

• Remediating any non-compliant work.
• Assisting the client to obtain a Certificate of Acceptance.
• Managing client disappointment.
• Rectifying damage to reputation both with a client and with the building consent authorities.
• Dealing with negative publicity and embarrassment for getting it wrong.
• Take care with exemptions

As most builders know, the Building Act outlines a range of circumstances where a building consent is not required. Exempt building work is set out in Schedule 1 of the Act. It is important, however, to check the exemptions very carefully.

If there is any uncertainty about whether or not an exemption applies, the safest option is to ensure that the owner checks with the council or applies for a building consent.

Variations to a contract can also impact on building consents. To avoid this, builders should inform their clients whether the variation will require an amendment consent.