Government looks to improve consent process

The government is waiting on prior decisions on a Law Commission review before proceeding with changes to the consent system aimed at reducing the cost of home building  

As part of its attempt to reduce the overall cost of building in New Zealand, the government is looking at ways to reduce the cost of building consents while decreasing processing times.

This comes after the Ministry of Business, Innovation and Employment established the National Building Consent System (NBCS) programme last year to build a picture of the current system. According to the research, consent fees account for 1-2% of building costs, with the average residential consent costing $3,149.

Building and Housing Minister Nick Smith said officials are considering introducing a national building consent system that all consenters would have to use.

“The government has been focusing on whether we can develop a common IT platform nationwide, to try and improve the efficiency and reduce the cost of consents,” said Smith. “We’ve also looked at the option of providing an alternative building consent system to local councils, but we haven’t made any decisions yet.”

The NBCS programme’s initial report found that less than 20% of property owners applied for their own consents, with the majority preferring to use their builder or architect. Customers also showed a preference towards online services, particularly the ability to apply for consents online.

The report also found that applicants expected large, complex consents to be processed in 40-60 working days – regulation requires they be completed in 20.

Law Commission recommends capping liability

However, the government is waiting for prior decisions on a Law Commission review before making any decisions.

The 2014 report on building consent authorities’ (BCA) legal liability – for faults found after a building deemed code compliant – recommends keeping the current system. This states that all parties are “jointly and severally” liable for the full cost of any fault, including builders, subcontractors and consenting authorities.

This means in the event that a number of parties are found guilty of negligence (e.g Designer, Builder and BCA) and the BCA is the only party ‘standing’, the BCA would have to pay the full cost of the award.

It suggested a $300,000 limit for single dwelling consents, and a $3 million limit for multi-unit developments. They also proposed any caps should not come into effect until July next year, when the financial assistance packages for leaky buildings will have expired.

The commission also recommended clarifying the responsibility and potential liability of building consents authorities issuing commercial consents by enacting a new section in The Building Act 2004.

RMA reform on hold

As part of its overall effort to reduce the cost of housing, the government had signaled that planned changes to the Resource Management Act could be in front of parliament as early as June.

But following the loss of the Northland electorate seat to Winston Peters, Environment Minister Dr Nick Smith
has indicated new reforms will need to be written.

The Government now requires the support of either United Future or Maori Party MPs, who are opposed to changes to sections six and seven of the act that give more weight to economic development over the environment.

Dr Smith said he was confident that they would still be able to bring a bill to parliament before the end of the year.