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Owner-Builder: Obtaining a Home Loan After Completion PDF Print E-mail
Tuesday, 09 December 2008

A recently received letter concerns an owner builder who wants to obtain a home loan. Our reader wrote as follows:

Owner BuilderPlease assist. We are owner builders and finished building our house in 2007.  It has been duly signed off by the City Council. We recently applied for a home loan and before the money is released they [the bank] need a Unit Enrolment Certificate which we do not possess.  Is there a way where we can obtain an exemption letter for the NHBRC or is it compulsory to enrol now retrospectively?

Les, All About Building’s Technical Advisor, has looked into the matter and provided the following comprehensive answer:

This is a problem that comes up quite regularly. In terms of the Act, as an Owner Builder, you are not required to enrol your house with the NHBRC. If you intend staying in it for at least five years, then there is no problem.  It does state however that Owner Builders need to apply for exemption from registration if you do not want any difficulties popping up within the five year warranty period normally provided by the NHBRC. The problem there is that in order to grant an exemption, the NHBRC needs to satisfy itself that you, as an owner builder (not just the owner) are in fact suitably qualified to build your own house. It is not simply an exemption from enrolment.
 
All banks, in terms of the Act, require that you enrol any new building with the NHBRC or apply for the Owner Builder Exemption Certificate where they are financing the construction through a bond. Enrolment is often sidestepped where the owner is funding the construction privately. What most people don't tell one, however, is that the banks insist on an NHBRC Completion Certificate for your house if you decide to sell your house within a five-year period, where the new buyer intends obtaining a bond. The same applies, as you have discovered, when you apply for a second bond on the property.
 
To answer your question, the NHBRC will not give you a retrospective Owner Builder Exemption Certificate, nor will they enrol your existing house retrospectively into their warranty scheme. The NHBRC also do not require that you enrol for any alterations. Your only course of action is to talk to your bankers and seek to obtain a waiver from them for requiring the certificate for the original house which is in most cases, a red tape issue. An on-site inspection by the bank's building inspectors to assess the situation would probably be required.


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