CCCs and backdated durability

By - , Build 120

Often councils are faced with issuing Code Compliance Certificates on building work that was completed years earlier. This article suggests a practical approach to backdating durability periods and managing legal liability.

House sales are often conditional on the issue of a Code Compliance Certificate (CCC). This is usually fairly straightforward when the building work has been completed recently.

Problems arise where the work was completed more than 2 years after the building consent was issued. The Building Code clause B2 Durability modification, established through the Department of Building and Housing’s determination process (see Build 116, page 19), backdates the durability period to the time that the building work was completed.

Timeframes

There are two important timeframes to consider, and the first is the durability period. Issuing a CCC provides a statement that the building work complies with the Building Code today and will continue to do so for the minimium durability period, which is defined as not less than 5, 15 or 50 years, depending on the building element and ease of replacement.

The Building Act also allows for civil proceedings related to building work to be brought against a council, provided it is within 10 years of the date of the building consent or CCC being issued, whichever is more recent. This second timeframe is commonly referred to as the 10-year long stop.

The two timeframes are connected in terms of the performance of the building work but unconnected in terms of the legislation. So how can a council signal to the current and future owner that the building work complies with the Code and will do so for the minimium durability period, while still recognising wear and tear? And how does it manage the 10-year long stop?

A practical solution would be to change the legislation to enable backdating of a CCC. However, the clause B2 modification to the building consent is currently the Department’s alternative to such a change.

Clause B2 modification process

When an owner applies for a B2 modification to the building consent, they must:

  • agree on the date that the work was effectively completed
  • pay a fee
  • complete a form
  • arrange a final inspection of building work by the Building Consent Authority
  • provide all necessary documentation to the Building Consent Authority.

This is the process on which a CCC can be issued with the B2 modification noted.

Individual councils can decide on the need for a B2 modification. There are no hard and fast rules. Councils need to adopt a sensible approach. B2 modifications should only be required where building work has been completed more than 5 years ago.

In theory, building work carried out under the 2004 Building Act should not require a B2 modification because the Building Consent Authority has to decide to issue or refuse a CCC within 2 years of the building consent being issued. But this does not always happen. For example, there have been occasions where the building work completed 2–3 years before an application for a CCC was made triggered the need for a B2 modification. This is being overly regulatory and does not provide benefit to the building owner or council.

Start of 10-year period of liability

Clarification is necessary around the impact of B2 modifications on the 10-year liability period.

In my view, the law is clear – the 10-year liability period starts from the date a CCC is issued, not the date that the B2 modification applies to.

However, the law seems to allow a situation where building failure could occur within the 10-year long stop but outside the minimum durability period.

What value is a B2 modification?

The B2 modification is the only tool currently available to manage the ongoing performance of unsigned-off building consents and the 10-year long stop. It allows the council to show a more accurate history of the building work. However, its effectiveness has yet to be tested in the Courts, and, unless the customer understands the B2 modification and the concept of B2 Durability, it may have little real value in terms of mitigating legal risk.

To provide the legal protection that councils hope for, the process needs to be robust and cover assessments of past maintenance as well as current performance of the building work. This goes beyond completing a checklist. It requires a description of what was seen, what evidence was found of maintenance (invoices are good) and how compliance with the Code was established. Photos can be useful, but many photos stored in council files are not.

A letter of explanation should also be attached to the CCC (and any future LIMs) explaining what a B2 modification means. It should make clear that, once the minimium durability period has been reached, there can be no assurance of continued Building Code compliance.

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