Submission to: The Local Government and Environment Select Committee. On: The Building Amendment Bill (No.4) From: Waikato Building Consent Group

Transcription

1 Submission to: The Local Government and Environment Select Committee On: The Building Amendment Bill (No.4) From: Waikato Building Consent Group Waikato District Council Hamilton City Council Waipa District Council Matamata Piako District Council Otorohanga District Council 10 June 2012 Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 1 of 9

2 TABLE OF CONTENTS 1.0 EXECUTIVE SUMMARY INTRODUCTION DISCUSSION Liability for Building Consent Authorities Mandatory Contracts Warrantees and Sureties Schedule one demolition public utilities Penalties Preparing the Industry for change RECOMMENDATIONS... 9 Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 2 of 9

3 1.0 EXECUTIVE SUMMARY 1. The Waikato Building Consent Group support a risk based consenting system only if Joint and several liability is changed to a system where payment of damages is proportionate to the level of involvement of all parties in any dispute. Territorial Authorities should not remain the de facto insurance for an industry that lacks ownership of its responsibilities. 2. Liability must be addressed prior to the implementation of any risk based consenting system. 3. The Department of Building and Housing needs to ensure that adequate education regarding the changes are under taken well in advance of any implementation. 4. The prescribed aspects of mandatory contracts, needs to be defined with consultation on this occurring. 5. The lack of insurances to back warrantees needs to be addressed prior to implementation. Insurances should be compulsory. 6. The warrantee period should be more reflective of the level of investment in the building project. 7. The changes to Schedule One (exempt building work) are positive. The information in Schedule One is now more accessible, making it easier to understand whether or not a proposed project requires a building consent. 8. We agree with the increased penalties for offences, but would like to see more consistency with infringements fines. 9. Issues around Building Amendment Bill no. 4 need to be addressed prior to the implementation of Risk Based consenting. This is essential for maintaining the quality of buildings being constructed and for capturing consumer confidence in the industry in a risk based consenting environment. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 3 of 9

4 2.0 INTRODUCTION 1. The councils of the Waikato Building Consent Group appreciate the opportunity to make a submission on the Building Amendment Bill (No. 4) (the Bill). 2. This submission was approved by the Governance Group representing the membership Councils of the Waikato Building Consent Group: Waikato District Council Hamilton City Council Waipa District Council Matamata Piako District Council Otorohanga District Council. 3. The Waikato Building Consent Group is a collaborative group of councils working to one quality assurance system across their five building consent authorities. Their goal is to deliver greater consistency of building control services across their territories. 4. The Councils of the Waikato Building Consent Group do not wish to present their submission to the Select Committee. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 4 of 9

5 4.0 DISCUSSION 3.1 Liability for Building Consent Authorities This Bill is the second of a group of bills intended to achieve: a better balance between the amount of control, the level of risk, and the capability and responsibility of those involved.. We want the amount of council oversight to be related to the risk and complexity of the building work and the skills of the people doing the work. And we want consumers to be confident that the people building their home will do the job well and stand behind their work. (Williamson, 2010: Cost-Effective Quality: Next Generation Building Control In New Zealand) But liability for BCAs was not addressed in Building Amendment Bill No. 3 Building amendment Bill No. 4 addresses consumer protection to some extent but still does not address the liability of Building Consent Authorities (BCAs). At the 2012 BOINZ conference Maurice Williamson (Minister Building and Construction) stated that he wanted proportionate accountability. This Bill fails to achieve that. Under Section 94 (1) (a) we are required to make a decision about compliance with the building code when deciding whether or not to issue the Code Compliance Certificate (Consent Completion certificate under Risk Based Consenting). Under risk based consenting this covers all types of building consents. Yet how can the local authorities competently make this call if under risk based consenting we have had limited or no involvement, in the assessment of the plans and specifications and the inspection of the building work? In other words unless we move to a proportionate liability system Territorial Authorities are still held in the liability framework without the ability to control the risk. In regard to consumer protection and liability, the DBH have stated that the signing of the Certificate of Design Work (COW) and the Record of Work (ROW) does not increase liability for the LBP providing them. This reduces the worth of the document to both the customer and to Territorial Authorities in getting the industry to take responsibility for the work they have done.. In order to avoid unnecessary difficulties during implementation of changes under this Bill, we would appreciate the Department of Building and Housing implementing a thorough educational program to assist the industry with the changes coming their way well in advance of the implementation date. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 5 of 9

6 3.2 Mandatory Contracts The Waikato Building Consent Group agrees with making sure consumers know what they can expect from building professionals and tradespeople and how to hold them to account. The introduction of mandatory contracts is a strong move in the right direction, as this will encourage transparency, responsibility and confidence in the construction industry. Information about mandatory contracts including associated prescribed documents need to be released well in advance of the implementation date to allow the industry time to familiarise themselves with what is required. Pre-contract provision of information Section 362D the prescribed information that must be disclosed has not been defined. It is impossible to evaluate something that is not there. It should include as a bear minimum the following information for all tradespeople working on the project: o Trade qualifications, years of experience, LBP or trade registrations, any professional memberships. o Details of arrangements to back up the warranty (or, alternatively, a statement that no such backing exists. o Details of any previous disputes over warranty obligations. o Prescribed checklist, which we assume covers contract matters that the consumer should consider. All prescribed information should have been included in this Bill. 3.3 Warrantees and Sureties The underlying issues around availability of insurance and surety still need s to be addressed. Currently there is no insurance cover available for the industry or for the Building Consent Authorities. If the insurance industry will not come to party, perhaps the government needs to consider a state backed insurance scheme. Insurances should be compulsory. Councils are no longer prepared to be the default insurers for an industry that is reluctant to stand by its work. Section 362A (e) requires defective building work under a residential building contract to be remedied if notified within 1 year of completion. This is not Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 6 of 9

7 enough, as serious problems may not emerge for several years. The warrantee period should be more reflective of the level of investment in the building project. Even the purchase of a new car, which is a far smaller investment, has at least a warrantee of 3-5 years, with caveats of meeting all service and maintenance requirements during this time. A one year period does not invoke confidence in the capability of the industry. We also recognise that where the contract is not honoured the builder can be taken to court. But if the builder is no longer available and there is no proportionate liability, local authorities will be paying for their mistakes. 3.4 Schedule one demolition public utilities The Waikato Building Consent Group agrees with the changes to Schedule One. The information is now more accessible and it is easier to understand whether or not a proposed project requires a building consent. Notification of demolitions to councils still remains a concern in the area of safe disconnection to public utilities. 3.5 Penalties Amendment to section 40(3) increased penalty from $100K to $200K: We are in agreement with this change as it will hopefully discourage illegal building work. Infringement fines referred to in this Bill should be consistent with the current infringement fines. 3.6 Preparing the Industry for change The Waikato Building Consent Group fully agree with the Minister s comments at the BOINZ 2012 conference, where he states that the proposed risk based consenting system will only be introduced when the industry is ready for it. He indicated that this will take some time and would only be introduced if a number of preconditions were met. This Bill, although good does not go far enough. The shift to self-certification of building work by Licensed Building Practitioners (LBPs) is a huge shift in responsibility. The industry needs time to come to terms with these responsibilities. The consumer protection solutions need to be in place well before implementing the risk based consenting system. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 7 of 9

8 The industry needs to be given sufficient time to prepare for further change. Let them first succeed and gain confidence as LBPs and in managing contracts and disclosures, then they will be more confident moving forward into risk based consenting. The public will also have more confidence in the changes. The Minister needs to provide sound education and delivery plans that put in place measurable parameters around proof of LBP readiness and competency prior to implementation of the proposed risk based consenting system. This needs to include basic project management and quality assurance skills to back up the mandatory contracts and consumer protection set out in this Bill. Set them up to succeed. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 8 of 9

9 4.0 RECOMMENDATIONS None of the changes proposed in this Bill will reduce the liability in dollar terms for any Territorial Authority unless the law surrounding Joint and Several Liability is changed. As the the last man standing, Territorial Authorities will still be required to pay the costs of the liable parties that are no longer accessible. The current liability regime needs to be replaced by a proportionate liability system. Liability needs to be addressed before the implementation of this Bill and risk based consenting. Risk Based consenting should not be introduced until the industry has come to terms with its responsibilities in regard to the collective changes to the Building Act represented in Building Amendment Bill No. 3 and in this Bill, Building Amendment Bill No. 4. This is essential for maintaining the quality of buildings being constructed and for capturing consumer confidence into the future. To achieve this, the Department of Building and Housing needs to ensure adequate education regarding changes well in advance of any implementation. They need to ensure that the industry has put in place systems that will help them succeed from day one, Provision of prescribed documents well in advance of implementation date would also allow time to adjust to the changes the industry faces. This also applies to the warrantee system. In conclusion, before this Bill is implemented, the Waikato Building Consent Group urges the Select Committee to address the two key issues of liability and insurance. Without addressing these, there can be no confidence moving forward. If any further clarification is needed regarding this submission, please contact: Dr Elizabeth Goodwin Manager, Waikato Building Consent Group Ph Elizabeth.goodwin@hcc.govt.nz The Councils of the Waikato Building Consent Group do not wish to present their submission to the Select Committee. Waikato Building Consent Group Submission: Building Amendment Bill No.4, Page 9 of 9