Builders to self-certify?

Rules Reduction Taskforce report recommends that builders certify their own work to remove joint and several liability pressures on councils

Local Government Minister Paula Bennett established the Rules Reduction Taskforce in October last year to identify rules and regulations that are not fit for purpose. The taskforce recently released its ‘Loopy Rules Report’, with recommendations including that builders be allowed to certify their own work.

They received more than 2,000 submissions, with 27% of issues raised relating to the Building Act – second only to the Resource Management Act (32%). Builders or tradespeople accounted for 16% of submissions, the second highest by category behind homeowners (22%). Councils also made up a significant portion (15%), with half of all councils around the country taking the opportunity to write in directly or attend a community meeting.

‘Loopy’ rules not all that loopy

According to the report, loopy rules are usually the unintended result of a well-meaning act, regulation, or practice instituted by a local council. Submitters stated a variety of reasons they considered rules loopy, including: being impractical, outdated, making no sense, setting an unachievable standard, being open to interpretation, etc.

However, the report also found that some loopy rules did not exist – they are based on people’s mistaken beliefs or incorrect advice.

Rules Reduction Taskforce co-chair Jacqui Dean said it came as a surprise to discover that a number of the loopy rules were, in fact, myths caused by the complex nature of legislation.

“They are misinterpretations and misunderstandings that have been repeated so often, they have taken on the status of facts,” said Dean. “We heard many examples where people are not clear about what they need to do or why. Myths fill the gap when clear information is hard to find.”

To acknowledge such misunderstandings, these myths were highlighted in the report along with the rules the taskforce determined need to be changed or removed.

Understanding councils’ risk-averse behaviour

The overwhelming issue seemed to be submitters’ frustration with councils’ risk-averse behaviour. The report found that councils’ difficulty in interpreting the regulations, alongside the onus of joint and several liability, causes delays, inconsistency and a reluctance to grant deviations from routine procedures.

Councils are responsible for administering 37 Acts of Parliament. Many of these are fairly complex and, since theintroduction of the Building Act and leaky building saga, the repercussions of getting it wrong are significant – councils or building consenting authorities are liable for any errors they make under the “joint and several liability” regime,

Under joint and several liability, a party may be  held liable for the whole of the damage if  other defendants are not able to pay their share. Under proportional liability, each party is responsible for their relative level of fault, which is a regime of comparative responsibility.

Legal action over time has cost councils millions of dollars, and the report said that, as a result, councils are more risk-averse.

The suggested long-term solution was that the building industry be responsible for its own work. 

Self-certification ‘worth exploring’

Currently, gasfitters and electricians sign off much of their own work. Ms Bennett said that self-certification for licensed builders at a certain competency is an idea worth exploring.

“We have a whole lot of cowboys, who, quite frankly, should not be [permitted to certify their own work]. However, we also have a whole lot of people who are really quite excellent and probably could.”

Graham Burke, who stepped down as president of the Specialist Trade Contractors Federation in September, said the industry was generally supportive of self-certification, but that it needed to be tempered by a review of the LBP scheme.

“People still feel that high-risk work, with ongoing cost implications for the building, should be inspected and consented by local authorities,” said Mr Burke. “Any self-certification scheme needs to be tied into the LBP scheme and its various levels, as well as being linked to the risk involved in the work. At the end of the day, it’s quite a complex issue.

“Another thing that people have mentioned to me is that proportional liability would be a lot fairer than joint and several. At the moment, the last man standing carries the cost – it doesn’t make building your business any easier.”

Lift industry standards

The report also acknowledged that, for self-certification to be a viable option, an industry-wide strategy is needed to first lift the professional practices of builders. It recommended that the government should work alongside the building industry to increase competency.

Mr Burke said that the boom and bust nature of construction was the biggest problem facing the sector, as it made it difficult to retain quality staff.

“We’ve got these huge highs, and then you get the equal lows. Because of the small size of the average construction business, most of them don’t have the resources to train people unless they’ve got work for them,” he said. “So what happens is that they only begin training well into an upwards swing. By the time trainees are becoming fully utilised, we’re back into a down swing and you end up losing them to another industry.”

Short-term solutions to expedite building work

While the report acknowledged that self-certification was unlikely in the short term, it did suggest that councils could make the building consent process faster and more efficient by speeding up the implementation of risk-based consenting and better promoting the use of Schedule 1 in the Building Act.

The report suggested part of the solution may be risk-based consenting, which matches the amount of plan checking and inspecting against the work’s risk, complexity, and workers’ capabilities.   

Schedule 1 provides a list of minor low-risk jobs that do not require building consents, which has been expanded twice in recent years. The taskforce found that it is often misunderstood and underused, recommending it be reviewed and that councils be more specific about what is and isn’t covered under Schedule 1.

To further simplify and speed up the consent process, the report also made the following recommendations:

• Develop a coordinated pipeline approach to regulation that includes stakeholder engagement and demonstrates the cost-benefit analysis.
• Use progressive building consents so work can begin sooner, with nonstructural details confirmed
  later.
• Streamline the determinations process for applicants.
• That the fix-up of the building fire upgrade regulations be completed this year. Ensure additional requirements imposed reflect the extra costs imposed and the benefits to be gained.

Building and Housing Minister Nick Smith said that his office was looking into all of the report’s recommendations, with initial proposals expected to be released in December.