The Ministry of Business, Innovation and Employment (MBIE) is proposing to require guarantee and insurance products for residential new builds and significant alterations.
The suggestion comes as part of the proposed Building System Legislative Reform, which is aimed at improving the quality of building work in New Zealand.
According to MBIE, a guarantee and insurance product would arrange problems to be fixed or for compensation when things go wrong in the building process. The idea is that a builder would be required to offer a homeowner a guarantee and insurance product before starting work on a new home or significant alteration.
The homeowner could actively opt out of having a guarantee and insurance product. MBIE said some builders may not be eligible to offer a guarantee and insurance product. It noted guarantee and insurance providers would determine who can do residential building work.
In the risk and liability area, the ministry also proposes to leave the liability settings for building consent authorities (BCA) unchanged.
“There are concerns that BCA liability leads to risk averse consenting processes,” MBIE added. “There have been suggestions to cap BCA liability. However, a cap may not be effective and may have unintended consequences for other participants in the building process.”
MBIE is seeking feedback on these proposals, alongside a range of proposals for building products and methods and occupational regulation. Submissions close on June 16.
