Significant changes are coming to the Building Act - what do you need to know?

Thursday, April 18, 2019

The building industry has long been an area of concern: the cost of building, quality of the work undertaken, and resolution of disputes when something goes wrong are all challenges faced on a regular basis. The Government has now announced the biggest review of the building sector since the Building Act was introduced in 2004.

The Ministry of Business, Innovation and Employment (MBIE) is focussed on three key outcomes for the industry:

  • Safe and durable buildings, with buildings constructed from quality products by a high‑performing building sector.
  • An efficient regulatory system that people have confidence in, which sets out clear roles and responsibilities so that people know what they’re accountable for, and what they must put right if things go wrong.
  • A high-performing building sector that builds it right the first time, with efficient and effective processes and practices that contribute to quality building work, and skilled and competent people make informed decisions about building design and building products.

There are a range of changes proposed, to help achieve these outcomes. They have been split into five different sections in MBIE’s Discussion Paper.

Building products and methods
MBIE aims to clarify roles and responsibilities for building products and methods. This will include requiring manufacturers and suppliers to provide information about building products, and strengthening the framework for product certification. They also propose updating the legislation to make consenting easier for modern methods of construction including off-site manufacturing. There are around 600,000 different building products in use in New Zealand, and the intention is to increase the quality of information about building products, hold people to account for building products and their use, and reduce the risk of defects in building work.

Occupational regulation
The licensed building practitioners’ scheme will be updated to raise the competence standards and broaden the definition of restricted building work. To ensure that work is done by appropriately qualified people, MBIE also intends to introduce a new licensing scheme for engineers and restrict who can carry out safety-critical engineering work, and to remove exemptions that allow unlicensed people to carry out plumbing, gasfitting and drainlaying work.

Risk and liability
When something goes wrong, claimants can face a long, expensive and stressful process to get compensated. MBIE is considering requiring a guarantee and insurance product for residential new builds and significant alterations, while allowing homeowners to actively opt out of it. It is also intending to leave the liability settings for building consent authorities unchanged, although is inviting comment on this, as there are concerns that building consent authorities have been facing a disproportionate share of liability due to the failure of other business involved.

Building levy
It is proposed that the building levy be reduced from $2.01 including GST to $1.50 including GST (per $1,000 of the estimated value of the building work), and that the building levy threshold be standardised at $20,444 including GST. MBIE also intends to broaden the scope of the levy to allow expenditure on stewardship activities such as monitoring, reviewing and reporting on regulatory systems, robust analysis and implementation support for changes to regulatory systems, and good regulator practice.

Offences, penalties and public notification
MBIE proposes to change some offences and penalties, with the aim of deterring poor behaviour and better aligning the Building Act with other legislation that protects people’s lives and wellbeing. This will include increasing the maximum fines, setting different maximum penalties for individuals and organisations, extending the time enforcement agencies can lay a charge from six months to one year, and modifying the definition of ‘publicly notify’ in section 7 of the Building Act to remove the requirement to publish in newspapers.

Details of the proposals are available here. Submissions on the proposals can be made until 16 June 2019.

If you have any questions about the proposals, or would like assistance with making a submission, please contact a member of our construction team.

 

Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.​

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