In many families in the 1950s, the elderly lived with their adult children. Sometimes that meant a spare bedroom. Sometimes it meant a small “granny flat” out the back, built without drama.
If you were buying a house, the basic responsibility was “buyer beware”. Get a lawyer. Get a builder mate to check it out. Take care. It is your money and your risk.
That more self-reliant DIY world has been fading for decades.
The Resource Management Act 1991 made everything harder. People had to apply for resource consents even for alterations that a DIY owner might once have done in a weekend or two without thinking twice about it.
The risk is that buyers are less careful when they assume well-intended government rules have protected them. In reality, councils may lack both the specialist knowledge and the time to guarantee good quality. They operate on a “best endeavours” basis.
As an economist, I have long been worried to read that it was commonplace for property developers to close down their companies as soon as the project was finished. Why were they not standing by their work and why were buyers buying regardless?
Such buyer neglect could only end in tears for buyers, regulators and ratepayers. Witness the costs of leaky homes.
These ideas about council financial responsibility were made real by the courts forcing them to pay as the “last man standing” when others could not. That made it riskier for a council to issue a consent. No consent, no hidden liability.
Too few homes were built in recent decades, and the result is awful.
A whole generation of younger adults face unduly high house prices while my retirement age generation wants to keep its tax-free capital gains.
The current Government rightly wants to make it easier for people to build more homes.
One of its welcome flagship initiatives is to help people build granny flats of up to 70sq m. It wants people to be able to build such flats on their own sections, without the delay and cost of full consents.
That sounds like old hat common sense. It should be simple.
It is not simple. Karel Boakes, president of the Building Officials Institute of New Zealand, recently explained how enduring red tape could hamstring the initiative.
She argued that the changes shift the burden of regulation rather than cut it. The shift is from councils to homeowners.
If you act as your own DIY project manager, compliance officer and risk manager, you face complex rules that could trip you up at every step.
There are rules about your site’s boundaries, natural hazards, pipes and cables, development contributions, covenants and easements, and sometimes other national rules such as those around contaminated land.
If you misunderstand a rule, you might not find out until much later when it is very expensive to correct it. You can be forced to make alterations to comply, even if you and your granny are happy with it as it is.
Even if your granny flat qualifies for an exemption from the usual consent hurdles, every part of the build must still meet the Building Code.
You must use licensed builders and gather and keep records of work, certificates from plumbers, drainlayers and electricians, gas safety documents and final design drawings. You must pay development contributions within tight time limits.
When you sell your property years later, a lawyer or valuer may find your records are incomplete. That lack might be costly. And you might be legally responsible to the buyer for up to 10 years for problems that you did not know existed at the time of sale.
But if you give up on a granny flat, what happens to granny? At the very least, she sees less of the grandchildren growing up.
Of course, good liability laws are very important. The issue is the best balance between buyer and seller liability, and between government regulation and judge-made law.
An unrealistic trust in government competence can sap initiative, enterprise and self-reliance.
House prices were much lower relative to incomes before 1991. Granny flats were common. There was greater “buyer beware” self-reliance.
Buyers have a stronger incentive to buy well when the consequences of their choices are their responsibility. Supplier reputation needs to count again. Best of luck granny.
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