What Happens If There Is Unconsented Work On A Property?

Unconsented work is one of those property issues that can sit quietly in the background for years, then suddenly become a very real problem when a home is being sold, bought, insured, refinanced, or renovated.

It might be a tiled shower, bathroom alteration, extra toilet, deck, covered outdoor area, garage conversion, removed wall, sleepout, plumbing change, or extension that does not appear clearly on the council records. Sometimes the current owner knows the history. Other times, they only discover it when they order the council property file, review the LIM, or a buyer raises questions during due diligence.

The short answer is that a property with unconsented work can still be sold, but it needs to be handled carefully. The issue is not just whether the work looks fine. The issue is whether it needed consent, whether it complies with the Building Code, whether it can be insured, whether a lender will accept it, and whether a future buyer may see it as a risk.

For sellers, unconsented work can affect buyer confidence, finance, insurance, disclosure, price, conditions, and whether a sale holds together. For buyers, it raises questions around what they are taking on, whether their bank will lend, whether their insurer will provide cover, and whether the issue could affect future resale.

What Does Unconsented Work Actually Mean?

Unconsented work generally means building work was carried out without the required building consent, or the correct sign-off was never completed.

In New Zealand, some building work does not need consent, but that does not mean it can be done any way the owner chooses. Even exempt building work still needs to comply with the Building Code. This is where confusion often starts, because a homeowner may assume “no consent required” means “no rules apply”. That is not the case.

The higher-risk areas are usually things involving structure, weathertightness, plumbing, drainage, fire safety, waterproofing, or changes to how a space is used. A tiled shower is a good example because waterproofing matters. A garage conversion is another, because it may affect ventilation, insulation, moisture, fire safety, parking, consent records, and the way the property is valued.

The question is not simply, “Was consent obtained?” The better question is, “Was consent needed, and if so, what evidence exists that the work was properly approved, inspected, and signed off?”

Common Examples That Show Up In Property Sales

The most common issues are usually not dramatic at first glance. They are often practical changes owners make to improve how the home works day to day.

Bathrooms are a big one. A moved bathroom, added toilet, tiled shower, laundry conversion, or plumbing change can all raise questions if the council records do not match the home.

Outdoor areas can also create issues. Decks, pergolas, covered patios, enclosed porches, retaining walls, and converted carports may need closer checking, especially if height, structure, drainage, boundary position, or weathertightness is involved.

Internal layout changes can be another red flag. Removing walls, opening up living spaces, changing a garage into a bedroom, or adding a sleepout may all affect how buyers, lawyers, insurers, and lenders view the property.

The problem is not always that the work is unsafe or poorly done. Sometimes it may be perfectly functional. The problem is that without the right paperwork, buyers are being asked to accept uncertainty.

Why It Matters To Sellers

For sellers, unconsented work is usually best dealt with early. If you wait for a buyer to discover it, it can feel like a problem that has been hidden, even if that was never your intention.

That matters because trust is a major part of a property transaction. Once a buyer becomes unsure, they may start questioning more than just the unconsented work. They may wonder what else they have missed, whether their bank will approve lending, whether insurance will be affected, and whether they are about to inherit someone else’s problem.

This can lead to longer due diligence periods, extra conditions, building reports, legal advice, renegotiation, delayed finance approval, or a buyer walking away.

It can also narrow the buyer pool. A confident cash buyer or a buyer with a strong deposit may look at the issue differently from someone relying on high lending. A buyer with limited deposit, strict bank conditions, or a nervous insurer may not have the same flexibility.

That does not mean the property cannot sell. It means the issue needs to be understood, documented where possible, and handled properly in the sales strategy.

Why It Matters To Buyers

For buyers, unconsented work is not something to brush aside because “it has been there for years”.

The key issue is future risk. If you buy the property, the problem may become yours. You may need to explain it to your insurer, your lender, your future buyer, or council later. You may also face extra cost if work needs to be investigated, opened up, repaired, removed, or regularised.

A buyer should check the LIM, council property file, title, plans, and any available consent or Code Compliance Certificate records. They should also speak with their lawyer, insurer, lender, and building inspector before going unconditional.

The important thing is not to assume the issue is fine because the property is already on the market. A sale listing is not proof that all work is consented, compliant, or insurable.

Will A Bank Lend On A Property With Unconsented Work?

This is one of the biggest questions, and the answer is not a clean yes or no.

A bank may still lend on a property with unconsented work, but it can make finance harder. Banks lend against the property as security, so if there is work that may affect value, saleability, insurance, safety, or future resale, the lender may see extra risk.

The buyer’s deposit can make a difference. A buyer with a strong deposit may have more options because the bank has a larger buffer. A buyer with a low deposit may face more scrutiny because the bank has less room if the property later proves harder to sell or insure.

The type of work matters too. A minor item may be treated differently from an unconsented bathroom, garage conversion, structural alteration, extension, or work involving drainage, waterproofing, weathertightness, or fire safety.

This is why sellers should not assume every buyer will be able to obtain finance. It is also why buyers should tell their broker or lender early. Finding out late can cause delays, stress, or a failed purchase.

Will Insurance Cover Unconsented Work?

Insurance is just as important as finance, because most lenders require proof of adequate insurance before settlement.

An insurer may still insure the property, but unconsented work can affect whether cover is available, whether the unconsented area is excluded, or whether a claim could be declined if the loss relates to that work. The outcome depends on the insurer, the type of work, the risk involved, and what has been disclosed.

Non-disclosure is the biggest danger. If a buyer or homeowner knows about unconsented work and does not tell the insurer, that can create problems later if there is a claim.

This matters for both sides. For buyers, it can affect whether they can safely proceed. For sellers, it can affect whether a buyer’s finance remains on track, because if insurance is not acceptable to the bank, lending may become an issue.

Can Unconsented Work Be Fixed Or Signed Off Later?

Sometimes, but not always.

In New Zealand, you generally cannot simply get a normal building consent after the work has already been completed. Building consent is meant to be obtained before the work starts.

For some completed work, the possible pathway is a Certificate of Acceptance, often called a COA. This is an application to council for building work that was carried out without the required consent, or where a Code Compliance Certificate cannot be issued in certain circumstances.

A COA is not a rubber stamp. Council needs to be satisfied, as far as it can be, that the work complies with the Building Code. Because council did not inspect the work while it was being completed, it may need extra evidence. That could include plans, photos, reports, producer statements, inspections, invasive investigation, or remedial work.

There are also situations where a COA cannot be issued. For example, MBIE notes that a Certificate of Acceptance cannot be issued for building work carried out before 1 July 1992, when building consent provisions came into force, or where a building consent had already been obtained for that work, except in specific circumstances.

So the answer is not “just get it signed off”. It may be possible, but it depends on the work, timing, evidence, and council’s assessment.

What Sellers Should Do Before Going To Market

If you are thinking about selling, check the paperwork early.

Start with the LIM and council property file, then compare those records with the home as it stands today. Look at bathrooms, toilets, decks, garages, sleepouts, extensions, walls, plumbing, drainage, and any areas that have clearly changed over time.

If something does not match, do not guess your way through it. Get advice before launching the property. Depending on the issue, that may involve council, a building inspector, builder, plumber, architect, engineer, property lawyer, or another suitably qualified adviser.

The goal is to understand the issue before buyers do. That gives you more control over how it is explained, whether anything should be fixed first, whether further documents should be gathered, and how it may affect price or buyer conditions.

Clear disclosure is usually better than letting a buyer discover the problem halfway through due diligence. It does not remove the issue, but it helps reduce surprise, and surprise is what often causes sales to wobble.

What Buyers Should Check Before Going Unconditional

Buyers should be careful, especially if the property has obvious alterations or areas that do not match the records.

Before going unconditional, buyers should check the LIM, council property file, title, plans, consent records, CCC records, insurance position, and finance approval. They should ask their lawyer to review the paperwork and talk to their insurer and lender about the specific issue.

A building inspection can help, but a building inspector is not the same as council approval. A builder may say the work appears sound, but that does not automatically mean it was consented, code compliant, insurable, or acceptable to the bank.

Buyers should also think ahead to resale. Even if they are comfortable with the issue now, a future buyer may not be. That can affect value, negotiation, and the ease of selling later.

Should The Seller Fix It Before Selling?

Not always.

Sometimes it makes sense to resolve the issue before going to market, especially if it is likely to affect lending, insurance, buyer confidence, or the number of people who can make an offer.

Other times, fixing it may take too long, cost too much, or create more uncertainty than the seller is prepared to take on. In that case, the better approach may be to disclose the issue clearly, provide available information, and price the property with the risk in mind.

This is a strategy decision, not just a paperwork decision.

If the work is central to the property’s value, such as an extra bathroom, converted garage, sleepout, or major addition, the issue is likely to matter more. If it is minor and well understood, it may be easier to manage.

The main thing is to know what you are dealing with before buyers are emotionally and financially deep into the process.

The Bottom Line

Unconsented work does not automatically stop a property from being sold, but it can affect buyer confidence, bank lending, insurance, price, conditions, and future resale.

For sellers, the smartest move is to check the records early, understand any mismatch, get proper advice, and decide how the issue should be handled before going to market.

For buyers, the smartest move is to slow down and ask the right questions before going unconditional. That means checking the council records, talking to your lawyer, confirming insurance, and making sure your lender knows exactly what they are being asked to lend against.

The problem is rarely just the building work itself. The real problem is uncertainty.

And in real estate, uncertainty is what makes people hesitate, renegotiate, or walk away.