The Legal ramifications of the new building consent exemption for “granny” flats/sleepouts

25 Mar 2026

As with all legal changes, there are some fish hooks to be aware of when thinking about converting your garage into a sleepout. The Building Act 2004 (Building Act) governs all building work carried out in New Zealand. Under the Act, restricted building work requires a building consent, unless it is specifically exempted under Schedule 1. A new exemption under the Act came into effect at the start of this year for 70m² ‘granny-flats’.

Normally, works under Schedule 1 which are exempt from requiring a building consent can be completed without any involvement from the local Council. However, this new exemption differs from the usual exemptions under the Act, which generally cover minor or low-risk works such as maintenance, repairs, or small detached structures.

Because these granny-flat buildings are intended to function as homes, they are classified as ‘housing’ under the Act and additional requirements apply – this new process is not as easy as just converting your garage into a sleepout.

Firstly, there are a range of limitations on the specifications of these dwellings – ranging from affecting materials, dimensions and construction methodology, down to the number of fixtures allowed in a flat, to name a few.

To help ensure compliance with these requirements, designs for granny-flats must be produced by Licensed Building Practitioners (LBP) qualified in design. In addition, before works on a granny-flat can commence, the proposed plans must be submitted to the local Council for it to issue a Project Information Memorandum (PIM).

Council’s PIM must set out certain factors in relation to the proposed works, including whether they likely satisfy the required characteristics for the exemption, the impact of any natural hazards on the subject land and other matters (e.g. bylaws, District Plan concerns) which may impact the works.

Once an owner has a PIM, they can commence construction of their granny-flat using the appropriately qualified professionals for each trade (LBP, electrician, plumbers, drainlayers and gasfitters), who must all provide the requisite records of work, certificates and details of the plans as-built to the owners to provide to Council to place on the property file.

The Building Act specifically sets out that a council will not assess the final documents received on completion of the works for compliance with the PIM or building code, so it is up to owners and contractors to make sure the works meet the relevant standards.

Granny flats already being built before this exemption came into force will still have to comply with the building consent issued for their construction.

Equally, despite the exemption, owners may still choose to build flats with a building consent if they choose to, in which case the Building Act applies as if a consent was always required for the work. This can be useful where either the builder or the owner wants the additional comfort of the council having signed off on the work and taking responsibility – so that all responsibility is not on the builder (or owner) alone.

Lastly, it is important for builders to note that the implied warranties under the Building Act still apply to these flats, as they constitute residential building work.