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Building law reform consultation closes

25 June 2019

MBIE's two-month consultation period for the proposed building law reforms has closed. It says it received 470 submissions from people and organisations across the building and construction sector.

The proposed reforms cover five key areas and focus on improving the quality of building work:

Building products and methods: MBIE says there are gaps in current regulations and disincentives that make the building regulatory system less efficient. The changes propose increasing the quality of information about building products, holding people to account for building products and their use, and reducing the risk of defects in building work.

Occupational regulation: Proposed changes aim to ensure that occupational regulation within the building sector is proportionate to public safety risks, there is confidence that practitioners have the right skills and will act professionally, and those responsible for substandard work will be held to account when it occurs. The definition of restricted building work would be broadened, there would be restrictions on who can carry out safety-critical engineering work, and exemptions allowing unqualified people to carry out sanitary plumbing, gasfitting and drainlaying in some cases would be repealed. A new tiered licensing system for licensed building practitioners is also proposed.

Risk and liability: A requirement for a guarantee and insurance product for all residential new builds and significant alterations is proposed, with an opt-out option. MBIE proposes to leave the liability settings for building consent authorities unchanged.

Building levy: Several changes to the building levy are proposed, with the aim of reducing building consent fees without affecting service levels for levy-payers. A broadening of the scope of the levy is proposed, to allow expenditure on stewardship activities such as monitoring, reviewing and reporting on regulatory systems. For example, on a $310,000 private house development, the levy bill would reduce from $623 to $465.

Offences, penalties and public notification: Proposals include an increase in the maximum financial penalties under the building Act 2004, with higher maximums for organisations than for individuals, and an extension in the timeframe for enforcement agencies to lay charges. An objective is align the Act with other legislation that protects people's lives and wellbeing.

Next steps

MBIE says it is working through the submissions, to inform its advice to the Minister for Building and Construction. It says the Minister will then decide what changes to recommend to Cabinet, which is expected to make decisions by the end of 2019.

MBIE says any legislative changes are likely to be rolled out over the next two to five years.

Last updated on the 16th September 2019