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COMMENT: The dangers of neglecting code compliance certificates

It’s a legal requirement for commercial buildings to have a Code Compliance Certificate yet many don’t. Building compliance expert Rosie Kilip explains why this is not a good thing...

Wednesday, August 28th 2019, 10:12AM 1 Comment

Buildings occupied by businesses or those for public use must be certified as safe to use by the local council.

If that hasn’t been done, how do you know those buttons on the elevator work? How do you know if there are enough fire escapes? How do you know the electrical systems aren’t going to shock someone? Or that the roof won’t cave in? 

The answer is quite simple: You don’t… There’s no assurance at all and that leaves your business horribly exposed.

Experience shows that most business owners simply don’t know if their building has a Code Compliance Certificate, (CCC) and that has implications for safety, insurance and legal liability.

It is essential to check for the CCC on a building - particularly if moving in after a renovation, a new build or after the last tenant moved on. It confirms the building consent was finished.

Trusting a contractor or letting agent is insufficient. So if someone says you do or don’t have enough fire escape signs or that your alarm is obsolete and needs replacing, how do you verify that information? Ask for legal proof.

The CCC confirms that building work is completed in accordance with the approved Building Consent documents and that the building complies with the Building Code. A CCC is issued by a Building Consent Authority as a requirement under section 95 of the Building Act 2004.

A CCC is issued based on inspections undertaken during and at the end of construction, plus documents like electrician certificates, etc.

It is issued only when the Council is satisfied that building work is completed and compliant, the final inspection is passed, and any specified systems for the building are capable of performing.

The absence of a CCC is not an uncommon problem. In fact, anecdotally, it happens more often than not.

Most of those organising new offices just don’t ask about it because they are blissfully unaware of the requirement. Yet if it’s a public area, they will need a temporary certificate for public use.

And what is the situation for landlords?

Getting the CCC is an overhead and if there isn’t any demand from tenants, many landlords will simply overlook it. Not out of malice or negligence, but just because there is no good reason for them to invest time and effort into taking care of paperwork when tenants aren’t insisting on it.

But the absence of a CCC has health and safety implications. That’s because a landlord is a “person conducting a business undertaking” (or PCBU) under New Zealand’s workplace healthy and safety legislation.

So there can be legal implications if someone suffers injury or loss as the result of non-compliant systems or facilities.

The absence of a CCC has implications for insurance too as a landlord might find their policies specify a compliant building as a condition of cover.

This all means that both landlords and tenants have a duty when it comes to ensuring their building is code compliant.

Landlords need to understand that having your CCC for consented building works is a legal requirement which, if ignored, could come back to bite you.

And tenants have to look past the flash paint job and fresh new carpets and insist on a CCC, particularly where there has been new building work.

* Rosie Killip is a director at compliance specialists Building Networks. For those who would like to learn more, Killip is speaking at Facilities Integrate on 25 September. Attendance is free

Tags: commercial property compliance construction developers insurance investment landlords property investment property management

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Comments from our readers

On 29 August 2019 at 8:24 am Winka said:
I certainly can see some sense in "compliance" for buildings.
However, I wrote to this column recently (a couple of weeks ago) and stated my views on the "over-compliance" being thrust upon buildings.

Eg:Here are just a selection of many in this building...
A). A building renovation recently completed which involved the fitting of large ceiling signs showing where the door is....yet the door has only been a few short meters away from anywhere inside.

B). This building is of what is considered the strongest of concrete, yet a full fire alarm system has been installed a huge cost.

C). This building was said to have been initially for work to remedy a couple of minor leaks of which one still remains

D). The original value of the building was circa $3.5 million, and the "remedial" work was quoted at $1.5 million and with "over-runs" went close to $2 million, with most of the work being absolutely unnecessary.

Those 4 are just a selection of several, and are typical of several such buildings that are noted.

These are examples of severely unnecessary contracts which we have all seen as new scaffold and white plastic-wrapped buildings trying to abide by often ridiculous over-compliance to buildings which have stood the test of time....all just giving the perception that we are experiencing a "booming economy?"

I see it as unnecessary DEBT.
DEBT such as this often ultimately "bites people in the exterior?"

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ANZ Blueprint to Build - - - -
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China Construction Bank Special - - - -
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Co-operative Bank - Standard 6.25 5.49 5.89 6.19
Credit Union Auckland 5.95 - - -
First Credit Union Special 5.85 5.35 5.85 -
Heartland Bank - Online 4.60 4.79 ▼5.15 ▼5.14
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HSBC Premier 6.34 5.09 5.34 5.59
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 6.00 4.79 5.15 5.69
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Kainga Ora - First Home Buyer Special - - - -
Kiwibank 6.00 5.95 6.45 ▼6.59
Kiwibank - Offset 6.00 - - -
Kiwibank Special - 4.95 5.45 ▼5.69
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Nelson Building Society 6.95 5.55 6.15 -
Pepper Money 5.29 - - -
Resimac 5.59 6.54 6.44 6.98
SBS Bank 6.29 5.39 5.79 5.99
SBS Bank Special - 4.89 5.29 5.49
Select Home Loans 6.89 - - -
TSB Bank 7.05 5.65 6.09 6.39
TSB Special 6.25 4.85 5.29 5.59
Unity 5.65 ▲5.45 ▲5.75 -
Wairarapa Building Society 6.49 5.55 6.15 -
Westforce credit union - Special - 5.35 5.85 -
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Westforce credit union - Standard 5.85 6.05 6.55 -
Westpac 6.39 5.55 6.05 6.29
Westpac - Offset 6.39 - - -
Westpac Special - 4.95 5.45 5.69
Median 6.34 5.35 5.79 5.83

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