Govt to rewrite liability provisions in building consents reform
The "joint and several liability" framework for managing building defects will be scrapped in what ministers call the biggest reform to the consenting system in "decades".
Building and Construction Minister Chris Penk officially revealed two "major" changes alongside Prime Minister Christopher Luxon at today's post-Cabinet media conference.
Penk said the overhaul would "ease the cost burden on ratepayers for defective building work" and be the most significant since the Building Act came into force in 2004.
As part of the changes, he said the Government was taking aim at "stalling" productivity in the building sector through cutting red tape and enabling more cost efficiencies.
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Row of designed and furnished townhouses next to a road in Auckland. (Source: istock.com)
"[The] sluggish consenting system is delaying projects and driving up costs, making the average standalone house here 50% more expensive to build than in Australia.
"We must eliminate system blockages to speed up the delivery of new homes and infrastructure," the Building and Construction Minister said.
What's happening with building defects and consents?
Introducing a bill to Parliament early next year, the Government intends to replace the existing "joint and several liability" framework with "proportionate liability," where "each party will only be responsible for the share of work they carried out."
"It's time to put the responsibility where it belongs," Penk said, saying the change would "ease the cost burden on ratepayers for defective building work."
"Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill.
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Window ledge crack (file image). (Source: istock.com)
"This often happens when one of the parties responsible cannot pay for repairs, for example, if a business goes bust.
"Currently, building owners can claim full compensation from any responsible party — and it's often councils, with the deepest pockets and no option to walk away, that end up paying out.
"The risk-aversion this creates [from council building consent authorities] leads to frustrating delays and extra cost for builders and homeowners."
Penk said this wouldn't mean councils were entirely off the hook as they will still "carry the same share of responsibility they do now for tasks like processing consent applications, carrying out inspections, and issuing code compliance certificates."
Govt 'exploring' protections for building owners
Penk asserted that building owners would "be protected if things go wrong," and that the Government was "exploring options such as requiring professional indemnity insurance and home warranties, similar to arrangements in Australia."
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The Government gave examples of home warranties that already exist here, like the Certified Builders' Halo Guarantee and the Master Builders' 10-Year Guarantee. It said the new regime was similar to what some Australian states had used since the 1990s.
Chris Penk (Source: 1News)
Penk also announced today that it would allow councils to voluntarily consolidate their building consent authority functions with each other.
"It is ridiculous that builders, designers and homeowners must navigate 66 different interpretations of the Building Code, because of the number of council building consent authorities across the country," Penk said.
"Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each building consent authority applies the rules differently.
"Many councils have asked for this and I expect they will seize the opportunity to consolidate, share resources like building inspectors and IT systems, and pass the savings on to ratepayers."
Today's changes are part of a broader reform programme for building and consents, which the Government argues will make it easier and more affordable to build.
ADVERTISEMENT
Building Consent Approvals is promising faster approvals for 'low-risk' house-building projects. (Source: 1News)
Earlier this month, Penk announced homeowners would soon be able to build small structures like garden sheds, sleepouts and garages closer to their property boundaries without requiring building consent.
Cabinet agreed to remove the minimum distance required between single-storey buildings under 10sqm and a property boundary or other residential building, and reduce it to one metre for buildings between 10 and 30 square metres.
Other recent changes included exempting "granny flats" from consenting rules, allowing trusted building companies to build without consents, and enabling approved plumbers and drainlayers to self-certify their own work.
'Positive step': Industry reacts to shake-up
Master Builders chief executive Ankit Sharma said the reforms represented a "positive step" towards a more consistent, efficient and balanced system.
"Builders have long faced duplication, delays, and inconsistent decisions across more than 60 different building consent authorities. The proposal to consolidate building consent authorities and introduce common data standards has the potential to reduce compliance costs, improve consistency across regions, and speed up approvals. These are practical solutions that, if implemented well, could drive meaningful productivity gains for the sector."
ADVERTISEMENT
Addressing liability settings was just as important, he said.
"The current joint-and-several system has meant councils carry a disproportionate share of risk, which has made them overly cautious and slowed down consenting. Moving to proportionate liability has the potential to create a fairer and more balanced system, provided it is paired with strong consumer protections such as home warranties and appropriate practitioner insurance."
The group representing councils, Local Government New Zealand, also welcomed the changes. President Sam Broughton said the Government's proposals would help speed up building consenting on new homes.
"We strongly believe it will have an instant and positive impact on housing growth; councils will be in a better position to consent more efficiently, with less legal risk borne by local government — and therefore less risk for ratepayers."
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Otago Daily Times
7 hours ago
- Otago Daily Times
Govt announces big changes for building consents
The coalition government is scrapping the building consents regime to ease the liability load on local councils. Building and Construction Minister Chris Penk said today the regime is "sluggish" and holding the building sector back. "Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill. "This often happens when one of the parties responsible cannot pay for repairs, for example, if a business goes bust." Penk said building owners could currently claim full compensation from any responsible party and it was often councils, with the deepest pockets and no ability to walk away, that ended up footing the bill. "The risk-aversion this creates leads to frustrating delays and extra cost for builders and homeowners." The government is scrapping the existing 'joint and several liability' regime in favour of a 'proportionate liability' one. Under the new model, each party will only be responsible for the share of work they carried out. "Building owners will be protected if things go wrong and we're exploring options such as requiring professional indemnity insurance and home warranties, similar to arrangements in Australia," Penk said. "In terms of looking across the Tasman, we can copy their homework on it to a large extent. We can learn from Australia's lessons in a positive way." The minister pointed to a 2015 case in Queenstown, where the the Oaks Shores body corporate filed a $160 million claim for weathertight defects as an example of system failure. "The developer had been placed into voluntary liquidation and was not sued, leaving ratepayers exposed to the entire claim. "If the case hadn't been settled privately, ratepayers could have faced rates increases of $300 a year for 30 years. It's time to put the responsibility where it belongs," Penk said. Councils get the green light to consolidate The government also announced it will allow councils to voluntarily consolidate their Building Consent Authority (BCAs) functions with each other. "It is ridiculous builders, designers and homeowners must navigate 67 different interpretations of the Building Code, because of the number of council BCAs across the country," Penk said. "Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each BCA applies the rules differently." Many councils had asked for the ability to consolidate, he said. "I expect they will seize the opportunity to consolidate, share resources like building inspectors and IT systems, and pass the savings on to ratepayers. "We know the sector is behind us. New Zealand Certified Builders have said that this is the most significant change for the building industry in a generation, that it has been a long time coming and the change is welcomed by the industry." These changes would reduce the cost of building as the delays now were with building consents being issued, he said. "If you reduce that delay you get better productivity." 'Massive impact' Building Industry Federation chief executive Julien Leys told RNZ's Midday Report programme a shift to proportionate liability in the building consents system would have a "massive" impact on the sector. "We're going to see builders that will have to have mandatory insurance, there'll be auditing. That risk is going to be transferred. That means the councils will not be living under this fear of litigation and ultimately that's going to enable much faster, more efficient processing of consents." Leys supported the move to open up consolidation for the country's BCAs. "I think the move is going to be to say, look we've got 67 Building Consent Authorities in the country - far too many - and we're seeing far too much inconsistency between those councils. "Let's look at the options: we can either get those councils to consolidate, bring their resources together, we could have one big overarching national point of contact. "I think the drive is to have consistency and reduce time. One of the options was to ensure we actually have 80 percent of consenting done in three days. It's going to speed up the whole process and bring down cost." The building sector would welcome any changes that made it easier and cheaper to build, Leys said. "It has certainly been a tough period that's highlighted the fact that we need efficiencies in the sector. It's been 21 years since we've had any major reforms of the code as well so it's timely. "Anything where we can address cost and delays is welcome. I say bring it on." High eligibility standards, mandatory insurance and ongoing auditing and bigger fines for non-compliance would ensure the changes didn't lead to another leaky homes crisis, he said.
Otago Daily Times
7 hours ago
- Otago Daily Times
Major shake-up of building consents
The coalition government is scrapping the building consents regime to ease the liability load on local councils. Building and Construction Minister Chris Penk said today the regime is "sluggish" and holding the building sector back. "Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill. "This often happens when one of the parties responsible cannot pay for repairs, for example, if a business goes bust." Penk said building owners could currently claim full compensation from any responsible party and it was often councils, with the deepest pockets and no ability to walk away, that ended up footing the bill. "The risk-aversion this creates leads to frustrating delays and extra cost for builders and homeowners." The government is scrapping the existing 'joint and several liability' regime in favour of a 'proportionate liability' one. Under the new model, each party will only be responsible for the share of work they carried out. "Building owners will be protected if things go wrong and we're exploring options such as requiring professional indemnity insurance and home warranties, similar to arrangements in Australia," Penk said. "In terms of looking across the Tasman, we can copy their homework on it to a large extent. We can learn from Australia's lessons in a positive way." The minister pointed to a 2015 case in Queenstown, where the the Oaks Shores body corporate filed a $160 million claim for weathertight defects as an example of system failure. "The developer had been placed into voluntary liquidation and was not sued, leaving ratepayers exposed to the entire claim. "If the case hadn't been settled privately, ratepayers could have faced rates increases of $300 a year for 30 years. It's time to put the responsibility where it belongs," Penk said. Councils get the green light to consolidate The government also announced it will allow councils to voluntarily consolidate their Building Consent Authority (BCAs) functions with each other. "It is ridiculous builders, designers and homeowners must navigate 67 different interpretations of the Building Code, because of the number of council BCAs across the country," Penk said. "Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each BCA applies the rules differently." Many councils had asked for the ability to consolidate, he said. "I expect they will seize the opportunity to consolidate, share resources like building inspectors and IT systems, and pass the savings on to ratepayers. "We know the sector is behind us. New Zealand Certified Builders have said that this is the most significant change for the building industry in a generation, that it has been a long time coming and the change is welcomed by the industry." These changes would reduce the cost of building as the delays now were with building consents being issued, he said. "If you reduce that delay you get better productivity." 'Massive impact' Building Industry Federation chief executive Julien Leys told RNZ's Midday Report programme a shift to proportionate liability in the building consents system would have a "massive" impact on the sector. "We're going to see builders that will have to have mandatory insurance, there'll be auditing. That risk is going to be transferred. That means the councils will not be living under this fear of litigation and ultimately that's going to enable much faster, more efficient processing of consents." Leys supported the move to open up consolidation for the country's BCAs. "I think the move is going to be to say, look we've got 67 Building Consent Authorities in the country - far too many - and we're seeing far too much inconsistency between those councils. "Let's look at the options: we can either get those councils to consolidate, bring their resources together, we could have one big overarching national point of contact. "I think the drive is to have consistency and reduce time. One of the options was to ensure we actually have 80 percent of consenting done in three days. It's going to speed up the whole process and bring down cost." The building sector would welcome any changes that made it easier and cheaper to build, Leys said. "It has certainly been a tough period that's highlighted the fact that we need efficiencies in the sector. It's been 21 years since we've had any major reforms of the code as well so it's timely. "Anything where we can address cost and delays is welcome. I say bring it on." High eligibility standards, mandatory insurance and ongoing auditing and bigger fines for non-compliance would ensure the changes didn't lead to another leaky homes crisis, he said.
1News
7 hours ago
- 1News
Govt to rewrite liability provisions in building consents reform
New changes to speed up a "sluggish" consenting system means councils will no longer be left "footing the bill" for major building defects, the Building Minister says. The "joint and several liability" framework for managing building defects will be scrapped in what ministers call the biggest reform to the consenting system in "decades". Building and Construction Minister Chris Penk officially revealed two "major" changes alongside Prime Minister Christopher Luxon at today's post-Cabinet media conference. Penk said the overhaul would "ease the cost burden on ratepayers for defective building work" and be the most significant since the Building Act came into force in 2004. As part of the changes, he said the Government was taking aim at "stalling" productivity in the building sector through cutting red tape and enabling more cost efficiencies. ADVERTISEMENT Row of designed and furnished townhouses next to a road in Auckland. (Source: "[The] sluggish consenting system is delaying projects and driving up costs, making the average standalone house here 50% more expensive to build than in Australia. "We must eliminate system blockages to speed up the delivery of new homes and infrastructure," the Building and Construction Minister said. What's happening with building defects and consents? Introducing a bill to Parliament early next year, the Government intends to replace the existing "joint and several liability" framework with "proportionate liability," where "each party will only be responsible for the share of work they carried out." "It's time to put the responsibility where it belongs," Penk said, saying the change would "ease the cost burden on ratepayers for defective building work." "Right now, councils are hesitant to sign off on building consents and inspections because they could be held liable for all defects, leaving ratepayers to foot the bill. ADVERTISEMENT Window ledge crack (file image). (Source: "This often happens when one of the parties responsible cannot pay for repairs, for example, if a business goes bust. "Currently, building owners can claim full compensation from any responsible party — and it's often councils, with the deepest pockets and no option to walk away, that end up paying out. "The risk-aversion this creates [from council building consent authorities] leads to frustrating delays and extra cost for builders and homeowners." Penk said this wouldn't mean councils were entirely off the hook as they will still "carry the same share of responsibility they do now for tasks like processing consent applications, carrying out inspections, and issuing code compliance certificates." Govt 'exploring' protections for building owners Penk asserted that building owners would "be protected if things go wrong," and that the Government was "exploring options such as requiring professional indemnity insurance and home warranties, similar to arrangements in Australia." ADVERTISEMENT The Government gave examples of home warranties that already exist here, like the Certified Builders' Halo Guarantee and the Master Builders' 10-Year Guarantee. It said the new regime was similar to what some Australian states had used since the 1990s. Chris Penk (Source: 1News) Penk also announced today that it would allow councils to voluntarily consolidate their building consent authority functions with each other. "It is ridiculous that builders, designers and homeowners must navigate 66 different interpretations of the Building Code, because of the number of council building consent authorities across the country," Penk said. "Builders can be rejected on paperwork that would be accepted by a neighbouring authority simply because each building consent authority applies the rules differently. "Many councils have asked for this and I expect they will seize the opportunity to consolidate, share resources like building inspectors and IT systems, and pass the savings on to ratepayers." Today's changes are part of a broader reform programme for building and consents, which the Government argues will make it easier and more affordable to build. ADVERTISEMENT Building Consent Approvals is promising faster approvals for 'low-risk' house-building projects. (Source: 1News) Earlier this month, Penk announced homeowners would soon be able to build small structures like garden sheds, sleepouts and garages closer to their property boundaries without requiring building consent. Cabinet agreed to remove the minimum distance required between single-storey buildings under 10sqm and a property boundary or other residential building, and reduce it to one metre for buildings between 10 and 30 square metres. Other recent changes included exempting "granny flats" from consenting rules, allowing trusted building companies to build without consents, and enabling approved plumbers and drainlayers to self-certify their own work. 'Positive step': Industry reacts to shake-up Master Builders chief executive Ankit Sharma said the reforms represented a "positive step" towards a more consistent, efficient and balanced system. "Builders have long faced duplication, delays, and inconsistent decisions across more than 60 different building consent authorities. The proposal to consolidate building consent authorities and introduce common data standards has the potential to reduce compliance costs, improve consistency across regions, and speed up approvals. These are practical solutions that, if implemented well, could drive meaningful productivity gains for the sector." ADVERTISEMENT Addressing liability settings was just as important, he said. "The current joint-and-several system has meant councils carry a disproportionate share of risk, which has made them overly cautious and slowed down consenting. Moving to proportionate liability has the potential to create a fairer and more balanced system, provided it is paired with strong consumer protections such as home warranties and appropriate practitioner insurance." The group representing councils, Local Government New Zealand, also welcomed the changes. President Sam Broughton said the Government's proposals would help speed up building consenting on new homes. "We strongly believe it will have an instant and positive impact on housing growth; councils will be in a better position to consent more efficiently, with less legal risk borne by local government — and therefore less risk for ratepayers."
