WHEN DO I GET THE BUILDING PERMIT FOR MY NEW HOME?
Every new home that’s built needs to have a permit from the relevant authority – which you’re no doubt aware of – but you might be at the stage of asking yourself when do I get the building permit for my new home.
And you’re probably wanting this for more than one reason. Perhaps the bank have told you they’ll need it. Or maybe you’re getting a shed built on your property by someone else, and the council have imposed a condition that you can’t start building the shed until the house permit has been issued. Whatever the reason, you’re keen to see this crucial document in your hot little hands.
There might be some nuances between builders on exactly when they get the permit (yes, the builder applies for it on your behalf) but there’s some fundamentals on the sequence along these lines:
1. Preliminary agreement
2. Initial plans, proposal and scope of works
3. Planning permit applied for and gained
4. Finalise colours, plans and draft contract
5. Contract signed
6. Full finance approval
7. Deposit paid
8. Building permit application prepared
9. Building permit applied for and gained
10. Start building your new home
Just a quick comment here – there’s a significant difference between a planning permit (sometimes called a development approval) and a building permit. A planning permit relates to your plan for the site, whereas a building permit relates to the nitty gritty of the house itself.
A few times over the years, we’ve had people question why the building permit isn’t gained earlier in the process, or they wonder why it’s at the end of the line, after the contract is signed and deposit paid. And it’s a reasonable question, so we’ll explain the 2 main reasons behind it.
Understanding the difference between a planning permit and a building permit will help you understand one of the reasons. As we mentioned earlier, the building permit is all about the house. In detail. Fine detail. And because of this, the builder needs to wait until all the tweaks and iterations have been completed on the house, even down to the colours, location of lights, size of the exhaust fan, and even the final site levels.
It can take you a lot of time and back and forth with the builder to get all this stuff sorted to the extent where it can be bedded down into a contract. Because the application for a building permit is extensive and incorporates a lot of detail, it just wouldn’t be feasible to prepare an application for a building permit in the early stages of the process, let alone apply for it.
The other reason is the sheer amount of work and the corresponding outlay to prepare for a building permit, which in turn creates the need for a legally binding commitment from the homeowner to the builder. There’s so many things to be finalised before the application can be lodged, including engineering, energy rating, warranty insurance, construction specifications and many other sundry documents.
The builder looks at all of this and says I’m not going to eat soup with a fork – I want a commitment to the extent of a deposit and contract so that I know it’s all going to happen and I’m not wasting a huge amount of time and effort getting the permit sorted. And it’s a fair comment -we can tell you from first-hand experience that it’s probably the heaviest office workload in the whole process.
But you might be saying to yourself How do I know that the permit will be approved? What if it gets knocked back? Ok, the answer to this one is once again in the difference between a planning permit and a building permit. A planning permit is a yes or no type of permit, but a building permit is provided when the surveyor is satisfied that everything meets the building code – they can’t say no if it all complies. There’s no such thing as a building permit refusal being issued.
So it comes down to you and the builder making sure everything’s smack on in the plans and scope of works. And then when you sign the contract with the builder, it includes an understanding that everything will comply with the code, which then paves the way for a building permit.
And what about the bank, you say. Righto, fairly straightforward answer to that one too. The banks will often tell customers they need a copy of the building permit, but rarely do they tell them at what stage they need this, which is the key here.
When a bank works through the full and formal finance approval process, they try and get things all sorted so that they’re ready to start dishing out the cash. And because they’re using the partially completed house as security (or equity) to lend against, they need to make sure it’s all legit otherwise their security wouldn’t be worth much. And part of this ‘making sure it’s legit’ is the building permit – they need to see a copy of it.
But they don’t need the permit to get the finance set up and in place ready to go; they only need it when they start paying out the money. So just work with them to provide the relevant documents as and when they need them and they’ll be fine.
And the process works – if you’ve still got the question in your mind of when do I get the building permit for my new home, just remember that there are thousands of builders and homeowners that work through it every year without a hitch.
And, as always, you can just ask for more detailed advice.
Keen to find out more?
Reach out to us. We’re here to help.