Public Sector

Building Act Review Moves Forward

Two new statutory provisions arising from the on-going review of the Building Act 2004 are noted.

New Bill

Amongst the many tasks the Government has set itself is reform in the building and construction sector in order to improve New Zealand's economic performance and prosperity.

The Government is currently implementing the outcome of its 2009 Building Act Review and subsequent policy decisions. On 6 September 2011 it introduced the Building Amendment Bill (No.4) (Bill) to Parliament.

As we write the Bill awaits its first reading, but it will no doubt be referred to the Local Government and Environment Select Committee for public submissions to be made and heard.

For a copy of the Bill click here.

The following broad changes are proposed in the Bill.

Building Code

Provisions relating to establishing compliance with the building code will be tightened by replacing compliance with a compliance document, with compliance with an acceptable solution or a verification method, both of which are will be issued by the Chief Executive by Gazette notice. New provisions relating to acceptable solutions and verification methods replace those formerly relating to compliance documents.

Building Consent

The maximum fine for building work undertaken without a building consent is proposed to rise from $100,000 to $200,000.

Schedule 1 will be extensively reorganised and a new section 42A will denote building work described in the Schedule, for which a building consent is not required.

Dangerous, Affected, Earthquake-prone and Insanitary Buildings

The powers relating to dangerous buildings are to be extended in relation to a new category of "affected building". A building is an affected building if it is adjacent to, adjoining or nearby a dangerous building. Sections 124 and 125, which relate to dangerous building notices, are to be replaced and extended in part to affected buildings, and will include a new power to impose a limited restriction on entry. Territorial authorities will be required to amend their policies on dangerous, earthquake-prone and insanitary buildings to take into account affected buildings.

Safety of Dams

New provisions are to be inserted in relation to the safety of dams, and in particular the concept of classifiable and referable dams is to be introduced to clarify the responsibilities of dam owners.

Power of Chief Executive

Certain procedural powers of the Chief Executive are extended or clarified.

Consumer Rights and Remedies in relation to Residential Building Works

A new Part 4A is to be inserted providing protection for consumers in relation to residential building contracts. There is provision for regulations to be made prescribing the information and a checklist required to be supplied by a builder to a client before entering into a residential building contract. Further information must be supplied to the client and relevant territorial authority on completion of the building work, and in the case of the information supplied to a territorial authority must be included on any Land Information Memorandum issued. Regulations will also prescribe the minimum price for building work that triggers a requirement for a residential building contract to be in writing, and the minimum terms of such a contract.

A series of implied warranties, that cannot be contracted out of, apply to any residential building contract or contract for the sale of any new household unit and benefit any owner regardless of whether or not a party to the contract. The right to sue in respect of a breach of warranty cannot be contracted out of, except in respect of a breach that is known to the parties. The warranty includes provisions, inter alia, as to:

  • compliance with plans and the building consent
  • suitability of materials
  • legal compliance
  • timing of completion
  • suitability for occupation
  • fitness for purpose.

A variety of remedies are provided for breach of warranties, including remedying the breach, cancellation of the contract, damages for loss and, for substantial breach, damages for loss of value.

A person who in the course of trade builds or acquires a household unit from the builder for re-sale must not complete a sale or allow purchaser to enter into possession before a consent compliance certificate has been issued. However it is possible to contract out of this restriction.

Infringement offences

There are new provisions relating to the authorisation and warranting of enforcement officers for infringement offences.

Building (Definition of Restricted Building Work) Order 2011

The above Order comes into force on 1 March 2012 and applies to building work or design work relating to a building consent applied for on or after that date.

It sets out the kinds of building work relating to the construction or alteration, or the external moisture management system, of a house or small-to-medium apartment building that must be undertaken or supervised by a licensed building practitioner. In addition it deems certain design work relating to:

the primary structure or the external moisture management system of a house or small-to-medium apartment building
fire safety systems of small-to-medium apartment buildings
to be restricted building work.

For a copy of the Order click here.

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The contents of this publication are general in nature and are not intended to serve as a substitute for legal advice on a specific matter. In the absence of such advice no responsibility is accepted by Brookfields for reliance on any of the information provided in this publication.


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