Time and time again, letters and telephone calls pass our desks regarding the NHBRC and what is required of an owner builder. One such letter came in recently from a reader:-
"Over the past four years, I have partially built my house on a cash basis. I obtained the services of a draughtsman who compiled the plans and submitted the plans to the local municipality and provided me with a copy of the plans. Six months elapsed and I made enquiries regarding the approval of the building plans. The lady instructed me to dig the foundation trenches as per the plans, which I did and contacted her again as the foundation trenches are done, therefore I urgently need the approved plans. She then instructed me to cast the foundations, she will follow up on the progress of the submitted plans. She told me then to carry on with the construction of the building.
When I received the approved plans 2.5 years later, the partial structure was nearly completed. I was then instructed by the local inspection department to make an appointment for the inspections. As the inspector arrived at the site, he rejected the building, as the soil was not suitable for a standard foundation (Plans were approved on a standard foundation). I had a quarrel with the inspector, due to the fact that he and his wife drew the plans and these were approved without an engineers design. The Public Protector got then involved, and found discrepancies within the department and instructed the department to urgently rectify the problem. A civil engineer inspected the building and made recommendations to strengthen the structure, which were then done and all inspections were then conducted and approved.
I contacted the NHBRC at the beginning of 2008, when I was informed by them that due to being an owner builder I did not need to register with NHBRC and I was informed not to sell the house within 5 years.
In short; At present, the partially structure is close to completion for me to move in soon and I have made an application for an extended bond (only the property/smallholding was first) at the bank to complete the house interior. The bank insisted on an NHBRC certificate, which I do not have. I honestly was not aware then that I needed to do application for exemption at the NHBRC, as this was the first time I have ever built a house. What is my next step to be exempted? Are there penalties involved?"
Les's advice follows:
Thank you for your enquiry. The two problems that you highlighted are probably the ones that I deal with most on the website.
As far as obtaining bank financing goes, there is only one real solution to the problem and that is for you to wait until the 5 years are up and then apply for financing. The reason for saying this is that there is no way at all that you will be able to enrol your house with the NHBRC given the stage of building that you are at right now.
In addition, the enrolment fee (1,3% of the value of the house PLUS the value of the land) plus fines that you will have to pay, even if enrolment were possible, are huge and seriously not worth it for the few months that the NHBRC warrantee may still be valid. Registration as an "Owner Builder" in the eyes of the NHBRC also implies that you are an owner who is a builder or at least competent enough to pass the criteria that they set out in the application. This is usually not a possibility for most people. The NHBRC also erred regarding the information that they gave to you. As an Owner Builder, using your own funds, you do not need to enroll your house but you do need to apply for exemption from enrolment. You can also not sell your house within a 5 year period to anyone requiring bank financing. A further problem here is trying to determine when the 5 year period started as it would normally have been from the date on the NHBRC enrolment form but since no form is available you may find that a bit difficult.
The second point that you mention is the fact that employing a cheap designer and following the advice that she gave turned out to be very expensive for you. The whole issue of a site investigation is fundamental to any design work as is the correct sizing of the foundations and many other issues. The fact that the plans took 2,5 years to get passed also spells disaster as you found out to your cost. I have posted a number of articles on the website on the subject of choosing your architect/designer because of the very issues that you have mentioned.
It is so unfortunate that situations like this occur as they can so easily be avoided if the correct information was available at the beginning. I am afraid that this is about the best that I can do.