Retrospective Consent Funding: Financing Code Compliance Solutions in New Zealand

You're buying your dream home. The building inspection reveals what the vendor didn't disclose: the sleepout was built without consent, the deck doesn't have a code compliance certificate, and the kitchen renovation was never properly signed off. The property is otherwise perfect, and the vendor has dropped the price by $45,000 to reflect these issues.

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Your bank calls: "We can't lend on this property until all building consent issues are resolved and code compliance certificates obtained."

The vendor won't fix the issues—they're selling as-is at the reduced price. You have the skills and resources to sort out the retrospective consents, but you need financing to purchase the property first. The bank won't budge: no code compliance, no lending.

This is where retrospective consent funding becomes essential. When properties have building consent or code compliance issues, banks typically decline lending until everything is fully resolved. Alternative lenders can provide financing that allows you to purchase the property and fund the consent rectification process.

Understanding retrospective consent funding

What is retrospective consent funding?

Retrospective consent funding provides financing for properties with building consent or code compliance issues that prevent bank lending. This includes:

• Unconsented building work (sleepouts, decks, extensions, conversions)
• Work completed without code compliance certificates (CCCs)
• Non-compliant alterations or renovations
• Historic building work with missing documentation
• Properties requiring building consent rectification

The facility typically covers:

• Property purchase price
• Cost of obtaining retrospective consents
• Remedial work required for consent approval
• Professional fees (architects, engineers, council fees)
• Building inspections and reports

Common building consent issues in NZ

Why this matters: Building Act 2004 requires building consent for most construction work. Unconsented work creates legal liability, affects property value, and prevents bank lending.

How retrospective consent funding works

Phase 1: Property purchase (Month 0)

• Luminate provides purchase finance
• Settlement proceeds despite consent issues
• You take ownership of property

Phase 2: Consent process (Months 1-6)

• Engage building professionals (architects, engineers)
• Prepare retrospective consent applications
• Submit to council
• Address any council requirements
• Complete remedial work if needed

Phase 3: Compliance and refinance (Months 6-12)

• Obtain code compliance certificates
• Get final council sign-off
• Update property file and LIM
• Refinance to bank lending
• Exit Luminate facility

Typical timeline: 12-18 months from property purchase to bank refinancing with all consents resolved.

Real-world case study: Marcus and Lisa's villa renovation discovery

Marcus and Lisa Patterson found their perfect first home: a 1920s villa in Grey Lynn, Auckland, listed at $1,280,000. The building inspection revealed several consent issues from previous owners' renovations.

The consent issues discovered

Unconsented work identified:

• Kitchen renovation (2018): Plumbing and electrical changes, no consent
• Bathroom addition (2015): New bathroom in former bedroom, unconsented
• Sleepout conversion (2019): Garage converted to studio, no consent
• Deck replacement (2017): Existing deck rebuilt, no CCC obtained

Professional assessment:

• Building inspector: "All work appears competently completed"
• Architect: "Likely obtainable retrospective consents, but needs formal applications"
• Engineer: "Structural work meets code, requires documentation"

Estimated rectification costs:

• Architects/engineers fees: $18,000
• Council consent fees: $4,500
• Minor remedial work: $8,200
• Additional inspections: $2,800
• Total: $33,500

The negotiation

The vendor disclosed the issues after the inspection and agreed to reduce the price:

• Original price: $1,280,000
• Price reduction: $65,000
• Agreed price: $1,215,000

Marcus and Lisa had:

• Deposit: $250,000 (20%+)
• Borrowing needed: $965,000
• Income: $185,000 combined
• Perfect credit history

The bank's position

Marcus and Lisa's bank pre-approved them for $1,000,000 based on the original price, subject to property approval.

Bank's response to consent issues:

• "Property has multiple unconsented building works"
• "Cannot lend until all building consents obtained and CCCs issued"
• "Must show full compliance with Building Act 2004"
• Outcome: Declined, must resolve before reapplying

Bank's advice: "Wait until vendor obtains retrospective consents and CCCs, then reapply."

The problem: Vendor was selling as-is, reduced price. They wouldn't spend $33,500+ and months obtaining consents—that's why they reduced the price.

Marcus and Lisa's frustration: "We understand building compliance. We have the money and expertise to sort out the consents. The price reduction more than covers it. But the bank won't even consider lending until it's all resolved—which the vendor won't do."

The Luminate solution

Luminate provided combined purchase and consent rectification funding:

Loan structure:

• Purchase price: $1,215,000
• Less deposit: $250,000
• Loan amount: $965,000
• Additional facility: $35,000 (consent rectification costs)
• Total facility: $1,000,000
• Property value (as-is): $1,215,000
• LVR: 82% (higher due to consent issues)
• Interest rate: 11.75%
• Term: 18 months
• Setup fee: $10,000 (1%)
• Legal fees: $2,800

Facility structure:

• Main loan: $965,000 (property purchase)
• Progress draw facility: $35,000 (drawn as needed for consent work)
• Interest-only for 18 months
• Single monthly payment for simplicity

Monthly costs:

• Interest at 11.75%: $9,792/month
• Compare to bank at 6.85%: $5,517/month
• Premium: $4,275/month

Assessment approach:

• Architect's report confirmed work quality
• Engineer confirmed structural compliance
• Estimated high probability of consent approval
• Price reduction ($65,000) exceeded rectification costs
• Strong deposit and buyer financial position
• Clear 18-month pathway to compliance and bank refinance

The consent rectification process

Months 1-2: Professional engagement

• Hired architect specializing in retrospective consents
• Engineer assessed structural elements
• Building surveyor documented existing work
• Prepared consent application packages
• Cost: $12,500 (drawn from progress facility)

Months 3-4: Council applications

• Submitted four separate consent applications
• Council requested additional information (standard)
• Responded with required documentation
• Engineer provided structural calculations
• Cost: $6,200 including council fees (drawn from facility)

Months 5-8: Inspections and minor works

• Council inspections scheduled
• Minor remedial work required (deck balustrade height)
• Electrical certification obtained
• Plumbing certification obtained
• Final inspections passed
• Cost: $9,800 (drawn from facility)

Months 9-10: CCC issuance

• All inspections passed
• Code compliance certificates issued
• LIM updated to show compliant work
• Building file updated at council
• Cost: $2,400 (final fees and surveyor)

Month 11: Property revaluation

• Updated valuation with all consents: $1,340,000
• Value increase reflects compliance and market movement
• New LVR: 75% ($1,000,000 ÷ $1,340,000)

Month 12: Bank refinancing

• Approached bank with full compliance documentation
• Standard bank approval process
• Refinanced at 6.95%
• New payment: $6,528/month (30-year P&I)

The cost analysis

Retrospective consent funding costs (12 months):

• Setup and legal: $12,800
• Interest premium over 12 months: $51,300
• Total Luminate costs: $64,100

Consent rectification costs:

• Professionals and council: $31,100 (slightly under estimate)

Total cost to purchase and resolve: $95,200

Compare to vendor price reduction: $65,000

Net additional cost: $30,200 to acquire compliant property

Property value outcome:

• Purchase price: $1,215,000
• Value after compliance: $1,340,000
• Immediate equity gain: $125,000

Marcus and Lisa's perspective: "We spent $30,200 more than the price reduction, but gained $125,000 in immediate equity. The bank originally valued this property at $1,280,000 as-is with consent issues. Now it's worth $1,340,000 fully compliant. Without Luminate, we would have missed this opportunity entirely—no other buyers could finance it either."

The outcome

• Successfully obtained all four retrospective consents
• Property fully compliant with Building Act
• Refinanced to bank at standard rates
• Created $125,000 equity through compliance resolution
• Acquired dream home in desirable location
• Added value through professional consent process

When retrospective consent funding makes sense

✓ Consider this option when:

1. Property is fundamentally sound but has consent issues

The underlying building work is:

• Completed to reasonable standard
• Structurally sound (engineer's opinion)
• Likely to obtain retrospective consent
• Not involving major building defects
• Primarily documentation/process issues

2. Price reduction reflects or exceeds rectification costs

Financial equation makes sense:

• Vendor reduced price for consent issues
• Reduction covers or exceeds estimated costs
• Property value post-compliance justifies investment
• Net position is financially beneficial

3. You have expertise or willingness to manage consent process

You're comfortable:

• Engaging building professionals
• Navigating council consent processes
• Managing contractors if remedial work needed
• Following through 6-12 month timeline
• Understanding building compliance requirements

4. Clear pathway to retrospective consent approval

Building professionals confirm:

• Work meets Building Code requirements
• No major structural concerns
• Standard retrospective consent process applicable
• Council likely to approve with minor modifications
• Timeline reasonable (6-12 months typical)

5. Property value supports the investment

The numbers work:

• Purchase price plus consent costs within budget
• Property value post-compliance exceeds total investment
• LVR will reduce to bank-acceptable levels (under 80%)
• Equity position strong after compliance

6. You can service higher interest rates temporarily

Financial capacity for:

• 18-month facility at alternative lending rates
• Consent rectification costs
• Buffer for unexpected costs
• Path to bank refinance clear

✗ This may not be suitable when:

1. Building work is fundamentally defective

Avoid if:

• Structural issues identified
• Poor workmanship evident
• Safety concerns present
• Major building defects exist
• Engineers recommend demolition/rebuild

Why: Retrospective consent funding is for documentation issues, not fundamental building problems requiring expensive remediation.

2. Retrospective consent unlikely to be granted

Red flags include:

• Work significantly non-compliant with Building Code
• Major departures from permitted construction
• Structural elements not to code
• Council indicates consent highly unlikely
• Professional advice suggests low probability

3. Consent costs exceed price reduction significantly

Poor financial equation:

• Vendor reduction: $30,000
• Estimated consent costs: $65,000
• Net loss of $35,000 before adding financing premium
• Better properties available for total cost

4. Property has multiple serious issues

Avoid if consent issues plus:

• Weathertightness concerns
• Major remediation required
• Title or boundary issues
• Environmental problems
• Multiple compounding problems

5. You can't afford consent costs plus higher interest

Be realistic about:

• Professional fees ($15,000-$40,000 typical)
• Potential remedial work
• Higher financing costs
• Timeline uncertainties
• Budget buffer requirements

Alternatives to retrospective consent funding

Alternative 1: Vendor obtains consents before sale

Negotiate with vendor to:

• Obtain retrospective consents before settlement
• Extend settlement timeline to allow consent process
• Vendor pays all costs, you pay full original price
• Or vendor pays costs, you accept extended timeline

Advantages:

• Purchase with bank financing at standard rates
• No consent process risk for you
• Property fully compliant at purchase

Disadvantages:

• Vendor may refuse (that's why price reduced)
• Extended timeline (6-12 months)
• May lose property to other buyers
• Vendor may not reduce price as much

Alternative 2: Walk away and find compliant property

Consider if:

• Other suitable properties available
• Consent process seems too risky
• Costs appear excessive
• Timeline too uncertain
• Financial stretch too significant

Reality check: Properties with consent issues often represent good value because most buyers can't finance them. Walking away may be right decision, but recognize you're passing up potential opportunity.

Alternative 3: Cash purchase if you have funds

If you have significant cash:

• Purchase outright without financing
• Take time to obtain consents without pressure
• Refinance once fully compliant
• No alternative lending costs

Requires:

• Substantial available cash
• Willingness to tie up funds 12-18 months
• Comfort managing consent process
• No urgent need for capital elsewhere

Alternative 4: Negotiate "subject to consent" conditional offer

Structure offer as:

• Conditional on retrospective consents being obtainable
• Professional due diligence period (20-40 days)
• Right to withdraw if consents appear unattainable
• Price reduction if additional issues discovered

Advantages:

• Reduced risk if consents prove difficult
• Ability to withdraw during due diligence
• Vendor may obtain some approvals during conditional period

Note: Requires vendor willing to accept conditional offer, which many won't for "as-is" reduced-price sales.

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Types of consent issues and rectification approaches

Common consent scenarios and solutions

The retrospective consent process

Step 1: Initial assessment

• Building inspection report
• Architect or designer review
• Engineer assessment (structural work)
• Feasibility and cost estimate

Step 2: Documentation preparation

• As-built drawings prepared
• Engineering calculations if required
• Compliance schedule developed
• Application forms completed

Step 3: Council application

• Submit retrospective consent application
• Pay council fees
• Respond to requests for information
• Address council concerns

Step 4: Inspections

• Council inspector site visits
• May require destructive testing
• Verification of compliance
• Documentation of existing work

Step 5: Remedial work (if required)

• Complete any non-compliant elements
• Address inspector requirements
• Obtain trade certifications
• Final inspections

Step 6: Code compliance certificate

• Final sign-off from council
• CCC issued
• Building file updated
• LIM report reflects compliance

Cost breakdown: Retrospective consent funding scenarios

Scenario 1: Single unconsented sleepout

Property details:

• Purchase price: $680,000
• Issue: Garage converted to sleepout without consent
• Estimated consent cost: $12,000

Luminate facility:

• Loan: $540,000 (deposit $140,000)
• Consent facility: $15,000
• Total: $555,000
• Rate: 10.75%
• Term: 12 months

Costs:

• Setup: $5,550
• Legal: $1,800
• Interest premium (vs bank): $21,600
• Total financing cost: $28,950

Consent costs:

• Architect/engineer: $6,500
• Council fees: $2,200
• Minor remedial: $2,800
• Total consent cost: $11,500

Total cost: $40,450

Scenario 2: Multiple consent issues

Property details:

• Purchase price: $950,000
• Issues: Kitchen, bathroom, deck all unconsented
• Estimated consent cost: $28,000

Luminate facility:

• Loan: $760,000 (deposit $190,000)
• Consent facility: $30,000
• Total: $790,000
• Rate: 11.25%
• Term: 15 months

Costs:

• Setup: $7,900
• Legal: $2,400
• Interest premium: $44,375
• Total financing cost: $54,675

Consent costs:

• Professionals: $18,200
• Council: $4,800
• Remedial: $6,500
• Total consent cost: $29,500

Total cost: $84,175

Value equation:

• Price reduction from vendor: $75,000
• Net additional cost: $9,175
• Property value increase post-compliance: $100,000+
• Net benefit: $90,825+

Scenario 3: Simple CCC completion

Property details:

• Purchase price: $520,000
• Issue: Deck built with consent but no CCC obtained
• Estimated cost: $4,500

Luminate facility:

• Loan: $420,000
• Consent facility: $6,000
• Total: $426,000
• Rate: 10.25%
• Term: 6 months

Costs:

• Setup: $4,260
• Legal: $1,500
• Interest premium: $8,200
• Total financing cost: $13,960

CCC costs:

• Building surveyor: $2,200
• Council inspection: $800
• Documentation: $1,200
• Total: $4,200

Total cost: $18,160

Frequently asked questions

Q: What if the consent can't be obtained?

A: This is the primary risk. Professional assessment before purchase mitigates this, but if consent proves unattainable, options include: completing available remedial work to gain consent, applying for certificate of acceptance (COA) as alternative, or worst case, removing non-compliant structures. Always get professional advice confirming consent probability before purchasing.

Q: How long does retrospective consent take?

A: Typical timeline is 6-12 months from application to CCC issuance. Simple cases (deck CCC completion) may take 3-4 months. Complex cases (multiple unconsented structures) may take 12-18 months. Council workload and application complexity are main factors. Plan for 12 months to be safe.

Q: Can I live in the property during the consent process?

A: Yes, you can occupy the property while obtaining retrospective consents. This is standard. Some access required for council inspections and any remedial work, but doesn't prevent occupancy. Better than renting while sorting out consents.

Q: What if consent costs exceed estimates?

A: Progress draw facilities include buffer (typically 10-15% above estimates). If costs significantly exceed estimates, options include: additional funding from Luminate if LVR allows, contributing personal funds for cost overruns, or scaling back work to budget. Always budget conservatively with 20%+ contingency.

Q: Do all councils have the same retrospective consent process?

A: Process is similar across NZ under Building Act 2004, but council interpretations and processing times vary. Auckland Council tends to be slower but well-resourced. Smaller councils may be faster but less familiar with complex retrospective consents. Engage professionals familiar with your local council.

Q: What's the difference between retrospective consent and certificate of acceptance?

A: Retrospective consent is full building consent obtained after work completed. Certificate of Acceptance (COA) is alternative where work done before consent obtained—acknowledges work complies with Building Code without full consent process. COA typically faster and cheaper but not always available depending on work type and timing.

Q: Will retrospective consent affect property value?

A: Obtaining retrospective consent and CCCs typically increases property value by removing uncertainty and enabling bank lending. Properties with unresolved consent issues trade at discounts (10-20% typical). Fully compliant properties command full market value. Value increase usually exceeds consent rectification costs.

Q: Can I refinance before all consents completed?

A: Banks require all building consent issues resolved before lending. Partial completion doesn't work—must have all CCCs issued and LIM updated. This is why 12-18 month facility terms are standard. Plan for full consent completion timeline before expecting bank refinance.

Working with building professionals

Essential professionals for consent process

Building architect or designer:

• Prepares retrospective consent applications
• Creates as-built drawings
• Coordinates with council
• Cost: $5,000-$15,000 depending on complexity

Structural engineer (if required):

• Assesses structural elements
• Provides compliance calculations
• Issues producer statements
• Cost: $3,000-$10,000

Building surveyor:

• Documents existing conditions
• Prepares measured drawings
• Assists with inspections
• Cost: $2,000-$6,000

Building consent specialists:

• Navigate council processes
• Manage application timelines
• Coordinate inspections
• Cost: Often included in architect fees

Choose professionals with:

• Experience in retrospective consents
• Familiarity with your local council
• Good council relationships
• Realistic timeline and cost estimates
• Clear communication practices

Ready to purchase property with consent issues?

Building consent and code compliance issues don't have to prevent property purchase. Contact Luminate Financial Group to discuss how our retrospective consent funding can help you acquire properties with compliance issues and fund the rectification process.

📞 Call 0800 333 400
📧 Email askus@luminate.co.nz
🌐 Visit luminate.co.nz

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