BWOF and the compliance schedule when you buy a commercial building: what transfers, and what to ask for
A building warrant of fitness (BWOF) is the owner's annual statement to the council that the inspection, maintenance and reporting procedures on the building's compliance schedule have been fully complied with for the previous 12 months, for every specified system the building has, such as sprinklers, fire alarms, lifts and emergency lighting. The Building Act 2004 places that obligation on the owner, so when you buy the building it becomes yours from settlement. Ask for the compliance schedule, the current BWOF and the last 12 months of independently qualified person (IQP) reports during due diligence, not after.
Which buildings need a compliance schedule
Under section 100 of the Building Act, a building that is not used wholly as a single household unit needs a compliance schedule if it has a specified system, and the schedule must cover every specified system the building has. Specified systems are listed in Schedule 1 of the Building (Specified Systems, Change the Use, and Earthquake-prone Buildings) Regulations 2005 and include automatic fire suppression, emergency warning systems, emergency lighting, automatic doors, riser mains, smoke control, backflow preventers, lifts and escalators, mechanical ventilation or air conditioning, and the emergency power and signage that serve those systems.
That is why almost every commercial or industrial building has a compliance schedule. A small unit with none of those systems may not need one, but check rather than assume: a fire alarm or a backflow preventer is enough on its own.
What a BWOF certifies, and what it does not
A current BWOF is not a statement that the building complies with the Building Code. Under section 108 it certifies one thing only: that the procedures in the compliance schedule have been carried out for the listed specified systems over the previous 12 months, with the IQP certificates attached. It says nothing about the roof, the cladding, the structure, the seismic rating or whether the fit-out was consented. A building can carry a current BWOF and still have a leaking roof and an unconsented mezzanine.
What the owner is required to do
The Building Act sets out the owner's obligations directly, and they are the obligations you take on:
keep each specified system performing to the standard in the compliance schedule, and keep the schedule in or near the building, available for inspection (section 105)
supply the council with a BWOF on each anniversary of the compliance schedule being issued, with the IQP certificates attached, and publicly display a copy (section 108)
obtain annual written reports from each IQP, keep them with the compliance schedule for two years, and produce them on request (section 110)
Failing to supply a BWOF, failing to display one, or displaying a false or misleading one is an offence, with fines up to $50,000 for an individual and $150,000 for a body corporate under section 108(6). An IQP who falsely certifies compliance faces the same penalties under section 108A. An IQP is a person the territorial authority has accepted as qualified to inspect, maintain and report on a specified system; acceptance is council by council, not a national licence, and an IQP is not a substitute for an engineer or a building surveyor.
What to ask the vendor for during due diligence
The compliance schedule must be kept in or near the building, so the vendor should be able to hand it over directly. Ask for all of these in writing:
the compliance schedule itself, and check that every system you can see in the building is on it
the current BWOF, and the previous two or three years' BWOFs
the IQP annual written reports for at least the last 12 months, which the owner must keep for two years
any council correspondence about the compliance schedule, the BWOF or the systems
the current maintenance contracts and the last year's invoices for the systems
The LIM should also list any notice, order or requisition the council has issued under the Building Act, so read it against what the vendor gives you. Our hub on commercial property due diligence in NZ covers where each record comes from and how long it takes.
What the standard agreement promises you
Clause 7.3(6) of the standard ADLS/REINZ agreement (now published with The Law Association of New Zealand, TLANZ) is a vendor warranty: where the building requires a compliance schedule, the vendor has complied with it, the building has a current BWOF, and the vendor knows of no undisclosed reason a BWOF could not next be supplied. A cut-down version applies under clause 7.4 where the property is only part of a building.
That warranty matters because of timing. Under clause 10.0, a claim for compensation must be notified on or before the last working day before settlement, and a breach does not defer your obligation to settle. A lapsed BWOF found after settlement leaves you in a much weaker position than one found during due diligence. Get the documents early and read them.
What the paperwork can signal
An expired or missing BWOF. The owner has missed an annual statutory obligation, and it can mean a system is failing inspection and nobody will certify it.
IQP reports with outstanding items. These are the closest thing to a condition report on the systems. Read them for anything marked not compliant or deferred.
Systems in the building that are not on the schedule. Sprinklers, a lift or mechanical ventilation that the schedule does not list can point to work done without a building consent, which is a separate and larger problem. Our note on producer statements and the Building Act explains how consented work is documented.
A change of use since the last consent. Sections 114 to 116 of the Building Act require the owner to notify the council before changing a building's use, and the building must then meet the Code as near as reasonably practicable for means of escape, fire rating, structure, sanitary facilities and protection of other property. An industrial shed that became a gym or a childcare centre without that step usually has fire and egress questions the BWOF will not answer.
Where the reports show a system failing or a schedule that does not match the building, bring in a fire engineer or building surveyor. Our guide to commercial building inspection costs sets out which specialist covers what.
What this doesn't tell you
This is a records check. It cannot tell you whether a sprinkler system will actually work in a fire; only an IQP inspection or a fire engineer's review can.
The Building Act provisions are described as at the time of writing; confirm the current text with your lawyer.
A compliance schedule and BWOF only cover what the council has issued. Systems installed without consent will not appear on either, and whether a warranty claim is worth pursuing is a question for your lawyer.
FAQ
What buildings need a BWOF in NZ?
Any building that is not used wholly as a single household unit and has at least one specified system, such as a fire alarm, sprinklers, a lift, mechanical ventilation or a backflow preventer, needs a compliance schedule and therefore an annual BWOF. That covers almost every commercial and industrial building.
Who is responsible for the BWOF after a building is sold?
The owner. The Building Act places the duty to maintain the specified systems and supply the annual BWOF on the owner, so the obligation is yours from settlement. The standard agreement includes a vendor warranty that the building has a current BWOF, so check it before you settle.
What is a compliance schedule and where do I get a copy?
It is the council-issued document listing the building's specified systems and the inspection, maintenance and reporting procedures each one must follow. The owner is required to keep it in or near the building, so ask the vendor for it directly; the underlying consent documents are also in the council property file.
What does an expired or missing BWOF mean for a purchase?
The vendor has not met an annual statutory obligation, and a specified system may be failing inspection. Raise it with your lawyer before settlement, because the vendor warranty on a current BWOF is easier to act on before you settle than after.
How much does maintaining a BWOF cost each year?
We could not find a reliable published figure. The cost is driven by how many specified systems the building has and the IQP and maintenance contracts for each, so ask the vendor for the last year's invoices to get a real number for that building.
What is a Form 12 and a Form 12A?
In practice the annual BWOF is commonly referred to as a Form 12, and the certificates each IQP provides for their systems as Form 12As; we did not verify those form numbers against the regulations for this page, so use the names your council uses. The Building Act requires the BWOF to have the IQP certificates attached, so ask for both when you request the BWOF.
Send us the property file and the BWOF documents
If you have a compliance schedule, BWOFs and IQP reports, or a property file, and want an independent read of whether they match the building in the listing, send them through and we will tell you in writing what the records show and which specialist, if any, you need next. Independent analyst, not a valuer, engineer, surveyor, building inspector or lawyer.
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