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Flood Of Boomers Selling Up Risk Suffering Big Losses Due To Lax 1990s Compliance (CCC)

With the bulk of Baby Boomers expected to sell up and retire between 2022-2037, the lax property compliance practices of the last 40 years are coming back to bite many who are at risk of losing all the value in their actual houses—buyers are only prepared to pay for the land—because they don't have Code of Compliance Certificates (CCC).

Ray White Mairangi Bay licensed real estate agent Drew Miller warned he is seeing a rising number of boomers who—wanting to sell up because they want to move into retirement village or downsize—suddenly discover renovations they did during the eighties and nineties were never issued with a CCC.

"Unfortunately, the passing of time and various upgrades to the building code have made it difficult for older houses to get a CCC in 2022. If a house does not have a CCC, the bank won't lend, which means generally sellers have to find a cash buyer.

"At the time, renovators, consultants, and owners overlooked or forgot to get a CCC issued. As a result, as the so-called 'Baby Boomer' generation (people born between 1946-64) approach retirement, many choose to sell their properties to free up capital to enjoy their last few decades.

Miller wants to raise awareness of the problem so Baby Boomer homeowners don't face last-minute disappointment and can act to remedy the situation before they retire.

"Many homes have had a single owner for at least a decade. These are generally folks who bought their house as a family home. And over time, they have done plenty of piecemeal work on the home.

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"Some of those renovations achieve consent, but it is dangerously easy to let the hustle and bustle of life get in the way and to forget the need to consent renovations. Fast-forward a few decades, and the financial consequences of that mistake can be significant," Miller said.

In New Zealand, an estimated one million people are in this age bracket or 23% of the country's total population.

According to the Reserve Bank of New Zealand, the demographic has assets of about $1.42 trillion tied up in real estate, with an overall net estimated wealth of $2.30 trillion.

Miller said many of his Baby Boomer clients are proud of the work they put into their homes but are unaware their properties may be peppered with unconsented renovations that could cut deeply into their net wealth.

He said properties are starting the listing process only to later discover significant consenting gaps that often require thousands of dollars in legal fees to solve, not to mention the construction costs for repairs to bring the home up to the standard.

"Over time, the standards for consent have gotten higher and higher. So, as Baby Boomer homeowners are moving to sell their homes, they are surprised to discover they need a retrospective CCC to demonstrate durability under the new building code," he said.

He offered an example of one property in an Auckland North Shore suburb valued at circa $3 million. A decade prior, the owners had to reclad the original brick exterior with plasterboard but failed to complete sign-off consent from the Council.

"The construction company managed the whole thing but didn't give final sign-off. In instances like this, where sellers are unable to get a CCC, prospective buyers only see value in the land, which can be devastating for the vendor. We want to avoid this happening to other people," Miller said.

Miller, who does a lot of work in helping homeowners resolve similar issues, offered some tips to help homeowners better prepare their properties for sale.

1. Get the LIM

The Land Information Memorandum, or LIM, is an invaluable tool that is available online. The LIM is a report with all the Council's relevant information about a property or section.


"The LIM can be a lifesaver for people looking to sell their homes. By comparing what the Council knows about your home with what you know about your renovations, you can quickly get an impression of potential gaps in consent.

"Checking the LIM is the first step to making sure your home is market-ready," Miller said.

2. Beware of the certificate of acceptance

It is possible to apply to your local Council for a certificate of acceptance (CoA) for work done without a building consent or in specific circumstances when a CCC can't be issued.

But Miller said that should be considered a stop-gap measure only. A CCC is still the gold standard.

"A CoA is a step down from a CCC—as a safe and sanitary report is a step down from CoA—and they attend to attract scrutiny. They generally spook first-time buyers," Miller said.

"Also, CoAs and safe and sanitary reports may make it harder to get insurance for your home, and while banks may lend on a CoA, they don't always feel comfortable doing so."

3. Talk to your real estate agent


Real estate agents do a lot of work to prepare a home for listing, which can include understanding what is consented in your home and what isn't.

If necessary, the agent can involve lawyers to draw up the disclosures required for the Council.

"If there are consent problems, sometimes you'll be able to list without making major repairs. If the issues are small, disclosure could be all the local Council needs to know, and you'll be good to go," Miller said.

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