If you sell a spec house, usually your lawyer or your real estate agent will prepare an agreement for sale and purchase of real estate in the standard form, and that will be the terms of the sale between you and the purchaser.
Or so you think. These days there are a lot of Acts of Parliament that insert special terms into agreements, whether you know it or not. These are known as “implied terms” and they override anything that your agreement may say. The Building Act is no exception. So when you sell your spec house, you might not be aware that there are a lot of rules built into your agreement for sale and purchase that you don’t necessarily know about, and some of them are fairly tough.
The leaky home crisis was the catalyst for most of the new building laws that have been introduced over the past decade.
Those reforms have largely stemmed from the Hunn Report of August 2002, which was a very good analysis of the state of the building industry at the time, and the factors that gave rise to leaky homes.
Since the turn of the century there have been some radical changes to building law in New Zealand, and 2012 will see a lot more.
For a start, as from 31 March 2012 most residential building will have to be done by a designer and a tradesman who have become licensed under the Government’s new licensing regime. Although over 13,000 licences have been issued to date, there are still many unlicensed builders and an even greater percentage of unlicensed brick and block layers; external plasterers and specialised roofers.
The affordability of housing in New Zealand has become such a hot topic that the Government has asked the New Zealand Productivity Commission to look into it.
As the first step in that process the Commission has put out an Issues Paper which reveals some interesting facts about New Zealand.
In recent times there has been a trend towards writing contracts and other legal documents in what is commonly called “plain English”.
That means, wording that can be easily understood by the average person, without any of the legalese, jargon or gobbledygook that legal documents are traditionally written in.
It would be fair to say that most people would regard it as a bit of a nuisance to have to get a Council consent to some building work they propose to do, especially for small projects.
They object to the expense and the delays, and particularly to the prospect that they might not actually be allowed to do exactly what they want to do. So they prefer to keep interfering Councils out of the picture if they can.
There is no question that the reputation of New Zealand’s residential building industry has declined since the 1980’s.
This has been graphically illustrated, of course, by the leaky building crisis that first came to prominence in 2001. There are many possible reasons for that state of affairs. There was a trend towards light-handed regulation over that period, the idea being that market forces would weed out the good builders and the good buildings from the bad. It is a reasonable theory, but it assumes consumers make rational, fully-informed decisions, which in practice is far from the truth. So bad builders and bad buildings continue to flourish.
This is a story about a scam that affects people who buy properties under what we call a “long term agreement”.
That is an agreement to purchase a parcel of land where the settlement of the purchase (when you pay the money in exchange for the signed transfer) is postponed for a lengthy period.
If you own, lease, or manage a commercial building, or you are building one or renovating one, or you plan to, then this article is for you.
Particularly if your commercial building has had building work done on it in the past 13 years, but there was no building consent issued for the work, or there has been no code compliance certificate (“CCC”) issued for the work under the Building Act.
Very soon, you will be able to go to a “registered conveyancer” instead of a lawyer to do the conveyancing on the property you have just bought or sold.
Conversely, lawyers will be able to sell real estate, in competition (or in cooperation) with real estate agents.