Do you need a builders report?

There is no legal requirement to get a builders report when you buy a house in New Zealand. Whether to get one is your decision, and it helps to know what the report covers and who else is looking at the property.

A builder’s report is a written report on the state of a house, from someone you hire and pay yourself. It is a private deal between you and them, so what it covers is what you agree.

The reason to arrange one yourself is that nobody else in the sale is checking the house on your behalf. The real estate agent does not have to go looking for problems. The council’s records show whether the council approved building work, which is narrower than whether the house is sound. A report the seller has already paid for gives you little protection if the inspector misses something.

This guide covers each of those, then how to make a report a condition of your offer.

What the agent has to tell you

Real estate agents work to a set of conduct rules, and those rules say less about defects than many buyers expect. An agent “is not required to discover hidden or underlying defects in land”.² They do have to tell you about problems they already know about.

There is an exception, and it is worth understanding how it works. Where a competent agent would think a property may have something hidden wrong with it, the rules require one of two things. The agent can tell you about the risk, so that you can go and get expert advice. Or the agent can get confirmation from the seller, supported by evidence or expert advice, that there is no defect.

If the seller provides that confirmation, the agent has met the rule without telling you anything.

An agent must also stop acting for a seller who instructs them to withhold that kind of information.

The agent works for the seller, who pays them. The rules still give the agent duties towards you as the buyer, and those duties stop short of inspecting the house. They also apply only to licensed agents, so a private sale has none of this in it.

The same rules describe your side of it. A buyer “is expected to inquire into risks regarding a property and to undertake the necessary inspections and seek advice”.² The rules add that an agent must not simply fall back on buyer beware.

Reports paid for by someone else

Sometimes a report already exists. The seller may have commissioned one before listing, or the agent may have a recent one on file.

The Real Estate Authority is clear about what that means for you. If the inspector missed something that later costs you money, “you are not protected because the inspector’s contract is with the seller, not you”.¹ The same goes for a report the agent hands you.

A report like that can still be useful reading. It is not a substitute for one you commission yourself.

Choosing an inspector

If you decide to get a report, you choose and pay the inspector yourself. It is worth taking some care over that choice, because New Zealand does not license inspectors. The Real Estate Authority says so directly: “there is no licensing regime for inspectors in New Zealand”.¹

The trade does have its own standards. Industry bodies register and accredit inspectors, and the Authority points to them “to help consumers find qualified inspectors”. Its guidance on offers says you “can use who you like to inspect the property, but we recommend using a registered property inspector”.³

The Authority suggests asking for three things:

• An accredited inspector, one “who complies with the New Zealand standard for property inspections”.¹
• A report that meets NZS 4306:2005, the building inspection standard, so you know what the inspection covered.
• A good level of indemnity insurance, which is what you would claim against if the inspector misses something expensive.

Asking a builder you know to have a look is a different thing. The Authority notes that “a builder may not provide a comprehensive report”.

What the council’s records show

Councils hold records of building work done on a property. Those records cover a narrower question than whether the house is sound. They show whether the council approved building work, and whether it signed the work off afterwards.

Two documents matter here.

A building consent is written permission from the council before most building work can start, confirming the plans meet the Building Code. Doing building work without one, where one is required, is an offence.⁴

Work done without a consent can become the new owner’s problem. If a council decides on reasonable grounds that someone has broken the Building Act, it must issue a notice to fix. The owner of the building is one of the people that notice can go to, and the Act gives failing to get a consent as its own example.⁵ By the time a council looks at it, the owner may be you.

A code compliance certificate is official confirmation from the council that finished building work matches the building consent that was approved for it. Only the council that issued the original consent can normally give you this. A council issues one once it accepts, on reasonable grounds, that the work complies with its consent.⁴

So the certificate records what the council accepted about that work on the day it signed it off. It says nothing about the condition of the house now.

If a deck, a bathroom or any other work has no consent or certificate, raise it with your lawyer before you sign. Councils also sell a report on what they hold about a property, which is a separate thing again: see what it costs to check a house.

Making it a condition of your offer

You do not have to pay for a report before you make an offer. You can make the offer depend on one instead, so that the sale only goes ahead if the report satisfies you.³

What that gives you depends on the wording. The Authority notes that there is no single standard agreement in New Zealand, and that different agencies use different ones carrying different clauses. Three things are worth checking in yours.

How long you have. The agreement sets out how many working days you have to satisfy your conditions.³ No rule fixes that number, so read the one in front of you.

Whether a poor report lets you withdraw. The Authority says you “may be able to withdraw your offer on those grounds”. Whether you can depends on the wording of the condition.

Whether the seller can see it. The Authority says the seller may ask for a physical copy of the report you are relying on.

Your lawyer should read the condition before you sign.

Other things to check

Three questions sit outside what this guide can answer.

What a report costs. Prices vary between inspectors, and no official body publishes a figure, so it is worth ringing a few.

Whether your bank wants one. That is a lending question, and this site does not cover lending.

Whether this particular house needs one. A listing will not tell you, and that is the question an inspection answers.

What to ask your lawyer

1. Who paid for this report, and does it protect me?
2. If the report finds something, how long do I have to pull out, and what do I have to give the seller?
3. Does the council's file show a code compliance certificate for the work that has been done here?

Say these as they are written. They are normal questions to ask.

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