Changes proposed to Building Act mean tougher consequences for failings

Tuesday, 16 April 2019

The proposals would also increase the maximum financial penalties for breaches of the Building Act.

Building firms could face fines of up to $1.5 million for serious breaches of the law under proposed changes to the Building Act.

The Government is consulting on changes it wants to make to the law - the most significant since it was introduced in 2004.

'These proposed reforms will deliver safer and more durable buildings, a high performing building sector, and better efficiency in our regulatory system,' said Building and Construction Minister Jenny Salesa.

She said it also delivered on the Government's commitments under the Construction Sector Accord.

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'We are consulting on proposals to improve the regulation of building products and modern methods of construction including off-site manufacturing; strengthen occupational regulation; look at how risk and liability are managed; possibly reduce the building levy; and strengthen penalties for those who don't comply with the law.'

The changes would include requiring product manufacturers and suppliers to give publicly accessible information about their products, including the scope and limitation of use and maintenance requirements.

They would would also create an explicit responsibility on manufacturers and suppliers to ensure products were fit for purpose.

The proposals also broaden the definition of restricted building work to include more complex non-residential work and impose higher competence requirements 'to increase confidence in the licensed building practitioner (LBP) scheme'.

That would mean more people would need to become an LBP or be supervised by one.

The Government also wants to require guarantees and insurance products for residential new builds and remodels.

'Many homeowners are not fully aware of the risks with building,' the consultation document says.

'Case study research suggests that there is low awareness of the risks of building work and the availability and benefits of guarantee and insurance products. A guarantee and insurance product would arrange for problems to be fixed or for compensation.'

At the moment only 40 per cent of homeowners take out a guarantee or insurance product to protect themselves if something goes wrong.

The proposals would also increase the maximum financial penalties for breaches of the Building Act.

At the moment offenders can be fined up to $200,000 for very serious breaches of the act that can cause serious risk or death or have serious consequences - but the proposals would change that to $300,000 for individuals and $1.5 million for organisations.

Serious breaches - relating to dishonesty and fraud or risk/performance assessment and hazard identification would attract penalties of $150,000 for individuals, from $100,000 at present, and $500,000 for organisations.

People would also no longer be required to publish notices in a printed daily newspaper when their work had to be publicly notified.

'I expect this reform to create a building sector where people understand their responsibilities and increase the number of skilled workers; where better quality means building it right first time and people are better protected if that doesn't happen; and where people are accountable when things go wrong,' Salesa said.

'A thriving, productive and sustainable building sector is vitally important for New Zealand's economic and social success. A healthy building sector will increase the wellbeing of all New Zealanders, and deliver on the Government's plan to ensure everyone has a warm, dry home.

'Clear and robust building laws are critical to enabling the building sector to reach its full potential.'