Determination 2017/015 – Summary

Posted: 31 May 2017

Determinations
Determination 2017/015 discusses the definition of an “owner” and whether a section 75 certificate was required on the building consent. It also discusses whether a building consent for work spanning two allotments can be granted to a leaseholder without a section 75 certificate.

Background

A section 75 certificate requires that, where a building spans two or more allotments held by “the owner in fee simple”, none of the allotments can be transferred or leased except in conjunction with the other relevant allotments.

A building consent was issued by the building consent authority (BCA) to the leaseholder for Stage 1 (foundations and drainage) for a proposed seven-storey hotel and carpark building. The proposed building is to be constructed over the boundary of two allotments. The BCA did not require a section 75 certificate to be registered as a condition of granting the building consent.

The owner believed a section 75 certificate was required and the BCA was incorrect to grant the consent without one. The owner is the fee simple owner of the allotments, while the leaseholder holds the current lease for the two allotments and is entitled to the rack rent from the land. 

Discussion

The Building Code does not allow a building to be built over an allotment boundary unless those parts of the building on different allotments are fully protected from each other in terms of fire safety and structure, or if a section 75 certificate is registered on the title.

Section 75 allows for a fee simple owner to construct a building over allotment boundaries without fully protecting the parts on different allotments from each other. Under section 75, if this right is exercised, the owner can only sell or lease the relevant allotments as a parcel. 

The term “owner of the fee simple” is referenced throughout sections 75–83. The determination’s interpretation of the Act is that these sections are only relevant if the fee simple owner is proposing the building work. A section 75 certificate can be viewed as conferring a right to an owner, by providing a quicker and more convenient way for building work to proceed across the boundary of two allotments, without the need for party walls or amalgamation of the allotments. 

The determination noted that limiting the application of section 75 to fee simple owners does not stop leaseholders from building across allotment boundaries. They may still build across the boundary of an allotment, as long as the building work on each allotment is fully protected from each other. Whether a leaseholder is able to undertake the building work is a matter between the leaseholder and the owner, and is not a matter for a BCA to take into account when deciding whether to grant the building consent. A building consent is not an authorisation for an owner to do something they may be restricted from doing under some other enactment, by a contract, by the terms of a lease, or by some other property law obligation, such as a covenant on a title. 

The decision

The determination found that the BCA was correct to conclude that a section 75 certificate was not required when the leaseholder applied for this building consent. Section 75 did not apply to the leaseholder’s application for this building work. The decision confirmed the granting of the building consent.

Determination 2017/015 in full.

Previous determinations is a register of all previous determinations.

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