Photo: RNZ

The government wants to speed up house building to date allowing builders to sign their own work.

The usual critics seem unusually optimistic, but there are warnings that the process must be managed properly or New Zealand risks a new crisis of leaky buildings – which last cost the country about $11 billion.

Buildings and Construction Minister Chris Penk’s plan would mean builders and plumbers no longer have to wait for inspections and resource consents from local councils by self-certifying work, which electricians can already do.

With the scheme still out for consultation, final details will not be set and announced until sometime next year.

Options considered

In a lengthy interview with RNZ for Focus on politics Podcast, Penk said it would be a risk-based approach, used only for simple jobs or reliable construction groups with a proven track record and finances to pay home buyers if things go wrong.

This would be coupled with tougher penalties for those found to be breaking the rules.

“An obvious starting point would be single-storey detached dwellings, of which there are many thousands … hopefully, as many as possible being built every year in this country,” he said.

“Technically, there is a standard design known as ‘3604’, which is actually a simple, standard residential dwelling of regular proportions, which we would consider low risk.

“That might give us a starting point and it might be enough to have as a self-certification scheme to get a lot of bang for the buck without having to go into risky territory where there are more building types or renovations complex. “

He said it had not yet been decided whether the scheme would cover the changes, but they could be added later if the system works as planned.

His advert highlighted the average 569 days to get full consent for a house and the 10 or more council inspections usually required. He told RNZ he hoped to halve the time required, but that was not a firm target or commitment.

The number of in-person inspections could also be reduced—perhaps to one at the beginning and one at the end—with other inspections conducted remotely via teleconference and the like.

Another detail still being explored was exactly what requirements should be met for a construction company to be considered trustworthy. Another support could include indemnity insurance.

Penk had told RNZ Control point Tuesday she they would not be one-person operationsand reiterated that.

“The strength of the financial position is probably the point to emphasize, we can’t have operators that are too small, because almost inevitably they will not have a strong enough position that if they were sued or otherwise held liable, then they would be able to come to party and deal with these shortcomings.

“But of course it can also happen that a big outfit finds themselves in a dangerous financial position – and unfortunately there have been a few examples over the years.”

Construction franchises should also be considered.

“It’s effectively a number of relatively small businesses under one banner and the extent to which the master franchisor could be held accountable or prepared to provide assurance that effectively guarantees quality.”

Risks, Complications and Insurance

Institute of Building Surveyors president David Clifton warned of the risks if the process is not managed properly, stressing the need for stronger continuing education processes in the industry to control the current high inspection failure rates.

“There are some fundamental building blocks that need to be put in place,” he said. “The first is some real steps around the cost of consent and the time they take consent needs to be set. We need to understand what our failure rates are and what is acceptable before we self-certify.

“Right now in Auckland Council there are a reasonable number of posts on LinkedIn talking about failure rates well over 20%, I don’t think it’s acceptable to turn on the tap and start self-certifying.”

Penk believed cowboy operators were largely responsible for the high rate of inspection failures and pointed to permanent license cancellation or higher fines as ways to counter this.

“The amount of the fine is under discussion. To be really clear, it has to be big enough to deter people from operating in a shocked way… seems like a $10,000 fine to me at this point. for example, and the temporary loss of a licensed construction professional license is not a sufficient deterrent.”

The announcement included confirmation that there would be stricter qualification requirements for builders, but details were still being drawn up.

Clifton highlighted education as key to reducing inspection failure rates. He said the current system of on-the-job training – continuing professional development – for builders and general contractors was “reasonably easy to follow, not much need for formal training and the like – just supervision of your staff”. . .

Standardization of simple house designs and materials would also be needed to ensure consistency of approach and ease of construction, he said, along with the establishment of a professional liability insurance market.

“Professional indemnity insurance is an expensive product with a high threshold.

“That market itself has to mature, there has to be financial support for that market and that means the international insurance markets have to come to the party and say ‘hey, yes, we can help support this piece of insurance and we make sure it’s properly funded,” so if there’s a claim, the insurance will go up.

“If you can’t do it with the support of the insurance market, then they’re going to have to come up with another scheme – so things like a government-backed scheme or something like that they have in the UK, or you’re going to have to look at Master Builders, Certified Builders and their warranty scheme and convert them into an insurance policy scheme.”

However, he said this approach would be a “big ask” for those professional bodies, which were set up primarily to represent their members rather than provide assurances against which the public could make claims.

Penk admitted there was work to be done.

“Yes, we will need to have some key details locked down from the start, and that will go to the criteria of construction companies operating at that high level and from the trader’s perspective, ensuring that the relevant registration boards – which already exist, by the way , and are created by statute – have the mandate to provide a truly robust system.

“There’s going to have to be more education and ongoing certification is going to have to be significant … I’d prefer to have a system that is more stringent, if anything, in terms of making sure people like that are qualified … but then to offer them. the trade-off, which is the ability to go ahead and do the job relatively free of inspections that don’t necessarily add anything.”

He said he had not yet discussed compensation with international providers or reinsurers – which cover insurers in the event of large-scale or sector-wide failures – but had spoken to some New Zealand insurers.

“They tell me that they would require certain conditions to be in place, such as an effective cowboy enforcement regime … high standards of continuing education, proper licensing and so on, which are all things we want in any case.”

He acknowledged that there could be a risk – however small – of the high cost of insurance leading to higher house building prices than under the previous system, but it would be part of the system anyway.

“If you think about building new homes or even renovations and in terms of the cost of doing business, I think it’s inevitable that insurance is going to be part of the picture anyway. If we’re going to ask for it, then, yes, there’s a possibility that it actually imposes an additional cost, but I think that cost if someone is acting in a reasonably prudent manner is probably there anyway.

“We may allow (in some cases) – for the convenience of the homeowner – for them to require the tradesman to still have their work approved by the council, and that could be the remedy for those for whom the insurance is not valid. may or may not be obtained at a reasonable price.”

He also pledged to ensure that councils would not be liable for work they did not sign off on themselves.

Non-partisan approach ‘very important’

Labour’s Kieran McAnulty this week expressed cautious optimism for changes.

Penk believed that maintaining a bipartisan approach to the system would be “very important.”

“I was pleased that they actually seem to be very keen on the need to improve our systems in building control… we know there will be good engagement as New Zealand Inc is asking us to get some solutions for housing provision. and the affordability crisis that has dogged this country over successive governments.

“I am very hopeful that we will have a bipartisan approach so that the sector as a whole, and therefore New Zealand, can have confidence that the settings are not going to change every three or six or nine years.”

The self-certification consultation revealed on Tuesday follows Penk’s other work with the sector, including plans announced a month earlier to reduce the number of consenting authorities. They also included other moves does not require consent for granny flats (buildings 60 square meters or less); achievement virtual inspections are default; and in April loosening restrictions on overseas construction products.

“It’s interesting about that, the further you get into this discussion, the more you realize that everyone’s interests are aligned here, whether it’s owners, governments, certainly local government on the current footprint of consenting authorities and insurers, everyone wants a system. which rewards those who do good work and penalizes those who do not”.