The Building Act review: What we think

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The Government’s announcement of its decisions arising from the review of the Building Act 2004 were made in mid-August and, for those of you who haven’t caught up with everything, this is a brief summary of the announcements.

The review was conducted by the Department of Building and Housing in consultation with a Sector Reference Group and other representatives of the construction sector, consumer groups and local and central government.
The planned changes to the Act are part of the Government’s “Better Building Blueprint”, and will include a series of incentives to “build it right first time”, making it easier and cheaper for New Zealanders to build good quality homes and buildings.

The initiatives will be phased in over time but, in the main, the Government plans to amend the Building Act in order to:
• Make it clear that builders and designers are accountable for making sure buildings and building work meet the minimum requirements set out in the Building Code.
WQ: So, the proposal is to make it very clear that designers will be responsible for ensuring the plans meet the building code, and builders will be responsible for the building meeting the design. That means should the design fail then it is the designer’s problem (assuming it was built according to the design), but if something failed due to poor building workmanship then that is the builder’s responsibility. We have no problem with that.

• Make it easier for home owners getting building work done to hold contractors to account through mandatory written contracts for work over $20,000, supported by information disclosure, clearer legal obligations, home warranties and remedies, and improved dispute resolution options.
WQ: So all building work over $20k must have a written contract — we have no problem with that. We advocate that all jobs should have a contract and we have a very good one in RBC1.

• The contract must contain certain elements — we have no problem with that as our contract already has everything that the Government wants in one.
• Compulsory disclosure to the client if you can offer a home warranty — we have no problem with that as we do that now, and we have our Master Build Guarantee available for all members.
• Compulsory disclosure of other relevant information, eg, what licence you have, whether your home warranty has a surety backer (and other details yet to be decided). We have no problem with that concept as our members have nothing to fear. It is designed to help consumers make more informed decisions before they engage a contractor.

• Make it quicker and easier to get a building consent for low-risk work, provided other quality assurance measures are met.
WQ: We look forward to the detail of what that looks like, but agree that not all building work should be treated as high risk. So low-risk work should require less paperwork, fewer inspections and be quicker to process.

• Exempt a broader range of minor work from needing a building consent eg, verandahs and carports.
WQ: We agree with this too, as it is an extension on the above.

The Government plans to undertake further work on:
• A preferred approach to deliver a nationally consistent and administratively efficient building regulatory system.
WQ: This is long overdue and must be fast tracked. We are a small country and have 72 BCAs processing a relatively low number of consents (by comparison) 72 different ways. We must be smarter at how we do this to obtain speed and consistency.

• Whether or not changes are needed to the way liability is allocated in negligence cases in the construction sector.
WQ: This is a biggie, and the proverbial elephant in the room, but we are pleased the Government is prepared to look at it more closely.

In addition to these new measures, the following existing initiatives will continue:
• Clarify Building Code requirements and improve education about, and access to, the Building Code and supporting information.
• Encourage building practitioners to become licensed, to promote, recognise and support professional skills and behaviour.
• Develop a joint work programme with construction sector leaders to improve sector productivity.

RMBF view

While we are supportive of these initiatives, the success of the changes will be in how they are implemented and in the operating detail.
We believe that the long-term success of any improvements hinges on the capability of the sector to enable self-certification of building work or risk-based, fast tracking of building consents with fewer inspections.

The changes are well overdue, but are unlikely to have an immediate impact on housing affordability and high compliance costs.
The RMBF will be working with the Government over the coming months on the finer points of delivering these changes to the sector.

For more info visit www.dbh.govt.nz/buildingactreview.