So, you’ve found the home of your dreams, and now it’s time to perform due diligence on the property. The contract of sale stipulates there is no building certificate. However, the selling agent has said there is an occupation certificate, so it’s ok because they’re virtually the same thing. Actually, NO, they’re not the same and there is a potential risk attached to moving forward with a purchase like this. Below is an explanation on the difference between the two, as it stands in New South Wales.

Both certificates are issued within the rules and regulations of:

Environmental Planning and Assessment Act 1979 NSW, and

Environmental Planning and Assessment Regulation 2000 NSW

 

Occupation Certificate

Description

An Occupation Certificate is required for the intention to occupy or use a new building or change the use of an existing building. The Building Code of Australia is used as the basis for what uses are permitted for different classes of building.

To issue a Certificate of Occupancy, the certifier checks necessary conditions to make sure the house can be occupied. Think of this inspection as ticking off the fundamentals for habitation, rather than the entire list of what makes a home final and complete.

Key considerations are structural adequacy, fire safety and the health, safety and amenity of future occupants of the building. What’s inspected and how it’s inspected may differ slightly between states, but this stage largely ensures that:

• roof drainage is properly plumbed
• handrails and balustrades are completed in accordance with the relevant standards
• necessary sanitary facilities are present and working
• water can’t penetrate the building envelope
• wet areas have been appropriately waterproofed and tiled / finished
• smoke detectors are in place and fully operational
• power is supplied and if it’s necessary for lighting, ventilation or smoke alarms
• gas piping is connected to any gas cooking appliances, ready for connection to the gas supply
• water supply has been properly connected

 

There are certain parts that may be unfinished when a Certificate of Occupancy is issued. These might include:

• floor coverings in non-wet areas (e.g. carpeting, tiling in hallways, floating floors)
• wall coverings in non-wet areas (e.g. decorative finishes and details, paintwork)
• interior doors
• basic fixtures (e.g. towel rails, handles on cupboards, doorbells)
• appliances (e.g. microwaves, heaters, security systems)

Occupation Certificates can be issued as an interim certificate or final certificate and can be issued for the whole or any part of a building.

A final occupation certificate authorises a person to commence occupation or use of a new building, or to commence a new use of an existing building.

Eligibility requirements

To be eligible for this certificate, the following may be required:

• Development Consent or Complying Development Certificate;
• Construction Certificate
• Fire Safety Certificate
• Compliance Certificate
• Building Sustainability Index Certificate (BASIX)

Duration

As specified on the certificate.

It’s also important to understand what a Certificate of Occupancy isn’t. While the certificate means that the house is technically fit to live in, it doesn’t mean that entitlement to move in at that very moment. The house will remain the responsibility of the builder until final handover.

Building Certificate

Description

The purpose of this certificate is to receive assurance from the local Council that the building complies with all relevant legislation, planning and standards. A building certificate can be requested by buyers or sellers of a property before settlement to make sure that what is being bought or sold is not going to be the subject of action by the council.  It is also commonly applied for when work is undertaken without the appropriate approvals being issued by council’s certifiers or a private certifier.

A building is classified as a temporary or permanent structure. The building certificate may apply to a part of or the whole structure.

When the certification is being conducted, some of the things the inspector will consider are:

• Does the building appear to be structurally sound?
• Are essential services in place?
• Are smoke detectors installed?
• Are there any significant non-compliances with the Building Code of Australia?
• Is stormwater drained satisfactorily?
• Is the Overflow Relief Gully open to air?
• Is the building clear of easements?
• Is the building likely to have detrimental impacts on neighbouring properties?
• Is comment required from a town planner or development engineer?
• Have any complaints been received in relation to the building/s?

If the application is granted, Council will be prevented from ordering work to be conducted for a period of seven years. During this period, council is unable to request the following:

• Alterations
• Demolition
• Additions
• Rebuilding

Eligibility

To be eligible for this certificate, the following should be provided:

• Building plans
• Specifications
• Survey reports
• Any other relevant certificates or information requested by the Council.

Duration

Seven years from date of issue.

 

IN SUMMARY, both certificates are issued by the competent authority of the location. 

The Building Certificate is more technical in nature and it certifies that the building has been completed as per the planning rules, sanctions and building rules of the location.

The Occupancy Certificate is issued after a survey which ensures building codes and safety regulations have been met, including facilities like sewage, water supply and electricity.

Ideally the building should not be handed over without the two.

Finally, you should always consult with your solicitor and council for more information.