Self-certified builds: game changer or risky business?

Wednesday, 30 October 2024

Introducing a self-certifying regime for builders and other tradespeople has the potential to be a “game changer”, but the plan comes with risks, experts say.

The Government has announced it will develop a new opt-in self-certification scheme for qualified building professionals, such as builders, plumbers, and drainlayers, and home building businesses.

It will allow such professionals to self-certify their own work on low risk builds without an inspection, while businesses with a proven track-record, such as group homebuilders, will be able to go through a more streamlined consent process.

Building and Construction minister Chris Penk said the building consent system was inefficient and added cost and time to the build process.

Under the current consent settings, councils and their ratepayers were liable for all defective work, and that created a highly conservative approach to consenting, which further slowed the process, he said.

“A model where building practitioners shoulder more of the risk should incentivise better quality work and lower the liability risk for ratepayers.”

Building professionals were already subject to quality assurances, but the scheme, which would be restricted to low-risk basic homes, would feature additional safeguards, he said.

These included a clear pathway to remedy poor work and strict disciplinary actions for careless or incompetent self-certifiers.

Penk told The Post the new regime should provide more protection for consumers, not less.

That was because often the people doing the work were more expert than the inspectors and carried significant insurance through licensing bodies such as Master Builders and Master Plumbers.

But the scheme would go through a robust consultation process, and detailed policy decisions would be made in the new year, he said.

It is the latest move in the Government’s war on the high building costs and red tape which have slowed down home building, and the industry has welcomed it enthusiastically.

Master Builders chief executive Ankit Sharma said in this year’s state of the sector report 71% of members said consenting delays impact project delivery and increase costs for homeowners.

“One of the key challenges for the sector is that we not only need to build quality homes, but we must also build them quickly and affordably. This scheme will help our members get on and build.”

The existing system placed unnecessary strain on productivity by applying the same standards to low-risk residential builds by well-established, proven builders, as to high-risk projects, he said.

“Moving to a more streamlined process means low-risk homes can be built more efficiently, freeing up resources for more complex builds.”

The proposed scheme would reward trusted, reliable builders, and foster higher standards across the sector by incentivising quality work, he said.

“But the consenting process is critical to ensuring quality homes. This approach is not for every home; it is for low-risk houses built by reputable, accredited builders, and backed by a building guarantee.”

Jennian Homes sales and franchise director Aidan Jury said any initiative that kept projects running, reduced wait time on-site, and reduced costs while better recognising the skills of proven accredited trades was a quantum leap into the future for the industry.

By reducing the number of inspections required for your standard residential builds, the self-certification scheme would be a game changer, he said.

“At Jennian Homes, we understand that time is a critical factor in any build. This scheme not only rewards professionalism and quality workmanship, but it will accelerate the build process and drive down overall cost for consumers..”

There was an ever-increasing need for quality, affordable housing, and his firm was excited to see the positive impact the scheme had for its future projects, and for its clients, he said.

Signature Homes chief executive Paul Bull said assuming a whole bunch of criteria was in place, his company would support the scheme.

It had the potential to take a stack load of time off the building process, he said.

“But there is a risk that some in the industry might want to just boost speed and take short-cuts, and there will not be the quality assurance necessary.

“For us as a franchisor, all our franchises need to demonstrate that they have adequate insurance in place. And we also have our own guarantee scheme in place.”

It would be relatively easy for Signature to develop a rigorous, internal inspection and self-certification process, he said.

“In our office, we have professional staff, and sub-trades contract on site, and we have site and project managers who inspect the sub-trades work, so we have an extra layer of insulation there.

“The risk will be where you have a smaller builder self-inspecting their own work. If self-certification is handed out to the wrong person, there could be problems.

“So there will need to be a careful selection process. And the businesses involved will have to prove they have financial substance to them in case something goes wrong.”

But the scheme would hit a sweet spot for group home builders, he said.

Canterbury-based construction expert Mike Blackburn said he was in two minds about the proposal.

Allowing builders and other trades greater autonomy and flexibility when completing work in some circumstances was a good idea, as long as controls are also put in place, he said.

“The industry has long complained about the restrictive, time consuming and costly nature of the current consenting system, and the variability in interpretations of the building code between different authorities.

“So anything that improves the system, and makes it easier, cheaper and simpler to build houses safely is great.”

But he was not a fan of no consents at all, and there did need to be some sort of regulatory oversight for a number of reasons, he said.

“It would mean a greater reliance on licensed building practitioners and registered persons, and not all of them are necessarily capable of delivering a quality, compliant product. There are plenty of examples where that has not happened.

“What happens when something goes wrong? Where are the teeth in the system? What is to stop a builder just saying they are going into liquidation, and will they be chased adequately in such cases?”

For that reason, liability issues that would have to be properly addressed, and insurance would be a significant problem, Blackburn said.

“There is a significant lack of insurance cover for individual builders, and currently both Master Builders and Certified Builders effectively ‘self insure’ because there is no New Zealand or international underwriter willing to take on the risk.”

He was looking forward to seeing more details of the proposals, he said.