Builders not liable for MCM fails

Builders who install BuiltReady certified modular component manufacturers products will not carry the can for any potential failure, says the Ministry of Building, Innovation and Employment

Announced by the Ministry of Building, Innovation and Employment (MBIE) in July, BuiltReady is a scheme that encourages the use of offsite construction and provides a more streamlined pathway through the consent process for modular component used in construction.

It was passed into law by the Building Amendment Act 2021 and is part of the wider Building System Reform that was introduced in June 2021. It will help modular component manufacturers (MCM) become certified and registered to produce modular building components deemed to comply with the Building Code.

The view from MBIE

Simon Thomas, National Manager Building System Assurance, said that builders who install MCM components would not be held liable for their failure, as long as they were installed correctly.

“BuiltReady certified and registered modular component manufacturers will be liable for any quality issues or defects in the components that they produce. Manufacturers who choose to participate in BuiltReady will have to meet quality standards and criteria in order to be BuiltReady certified, and demonstrate adequate means to cover any potential civil liabilities that may arise in relation to its modular components.”

The quality standards and criteria requirements provide assurance that manufacturers can cover any civil liabilities they may incur through their activities in the scheme, says Thomas.

“This helps ensure there are sufficient protections for consumers if something goes wrong. The entire prefabricated construction process will be assessed and certified including design (where relevant), manufacture, assembly, transportation and installation on site.”

Building consent authorities (BCAs) are not liable for any failures, either.

“A manufacturer’s certificate provides assurance that a modular component complies with the Building Code. The BuiltReady certificate must be accepted by BCAs as evidence that the requirements of the Building Code are met. BCAs are not liable for BuiltReady certificates for modular components.”

Positive industry reponse

The scheme has been met with encouragement by the industry – says Malcolm Fleming, Chief Executive of New Zealand Certified Builders (NZCB).

“NZCB believes this new policy will facilitate greater usage of modern methods of construction (MMC). In our view, the new certification scheme benefits are compelling: for builders, greater usage of MMC will reduce construction time and the incidence of rework; while for homeowners, greater adoption of more efficient construction technologies should contribute to reducing building costs.”

Applications for certification opens from mid-2023 and a register of certified manufacturers will be available at building.govt.nz. Any enquiries can be sent to
builtready@mbie.govt.nz.