Note: Since the publication of this article, the Government has announced on 31 July 2023 that the submissions deadline has been extended to 21 August 2023, at 5pm.
The New Zealand Government is underway with a substantive, end-to-end review of the building consent system. A key objective of the review is to ensure that building work is undertaken correctly the first time, in an effort to provide safe and durable buildings.
The next phase of the review is now underway after an initial round of consultation in 2022, submissions on the options are due by 7 August 2023. The Ministry of Business, Innovation and Employment (MBIE) has released documents outlining the proposed reform options. The proposals will impact participants in the building consent system, including designers, engineers and anyone wishing to undertake building works.
Set out below is a general overview of the key proposals in MBIE’s options paper, together with the next stage of the review process after submissions close.
The options paper seeks feedback on proposals to achieve several key objectives, including to:
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Provide new assurance pathways, including allowing certain works to be self-certified and proposing a new commercial consent pathway
The options paper proposes to shift some of the building consent authorities’ responsibility and assurance role to other participants who have more appropriate expertise to manage risks. Two main options are proposed to address this.
(a) Self-certification of building work
The paper includes a proposal to permit accredited companies and approved professionals to self-certify building work that they have carried out, avoiding the need for building consent authorities to review their plans and/or inspect their work. The paper acknowledges that if this proposal is progressed, careful consideration will be needed to ensure consumers remain protected. Additional feedback is sought relating to what the eligibility criteria for such accredited companies and approved professionals would look like.
(b) New consent pathway for commercial building work
The options paper acknowledges that while both commercial and residential projects are currently subject to the same building consent process, in practice, many commercial projects are commissioned by well-informed clients and are designed and built by experienced, contractually accountable professionals.
Some building consent authorities may lack the in-house expertise to carry out detailed design checks and inspections of such commercial projects, and instead rely heavily on third-party peer reviews.
MBIE is therefore proposing to introduce a separate “commercial consent” pathway, and is seeking feedback on what this pathway might look like (i.e. what projects would be most suited to use it), and where accountabilities and responsibilities will lie for various parties, including design and construction professionals as well as the building owners.
2. Promote competition in the building regulatory system
In its 2022 market study on residential building supplies, the Commerce Commission noted that competition for the supply and acquisition of such supplies is not working as well as it could1. As noted by the Commission, greater competition generally delivers numerous benefits to the market, such as reduced prices for customers and enhanced innovation and product quality amongst suppliers.
Drawing from the Commission’s recommendations, MBIE is consulting on how best to give effect to competition as an objective in the building regulatory system. It has noted its preferred approach is to include competition as a principle to be applied when authorities are performing functions or exercising powers under the Building Act 2004. Under this proposal, guidance would be issued to territorial authorities in relation to promoting competition in the building regulatory system and decision-making.
3. Make the process to vary or substitute building products easier
A common concern raised in the context of competition in the building regulatory system is that building consent applications often specify building products by brand. Although the current regime includes a process allowing “minor variations” to be made to a building consent (to substitute those branded products with alternative materials) without needing a formal amendment to a building consent, this process can be perceived as cumbersome, and is therefore often avoided.
To improve flexibility and to encourage competition in the building supplies sector, MBIE is seeking views on options to make the process for product variations and substitutions easier.
4. Strengthen system participants’ roles and responsibilities
The options paper notes that building consent authorities hold too much responsibility for providing assurance of compliance with the Building Code, and that there are therefore weak incentives for other system participants to undertake building work correctly the first time.
Several options are proposed to strengthen accountability and improve the clarity of participants’ roles and responsibilities in the system. MBIE’s preferred options include requiring all designers to provide a declaration of design compliance alongside the building consent application.
Issues are also identified with the use of producer statements which are professional opinions based on specialist expertise and judgement. Building consent authorities can consider producer statements in deciding whether to issue building consents and code compliance certificates. MBIE is seeking feedback on ways to provide the building sector with more certainty and consistency on how producer statements should be used, and the extent to which they should be relied on by building consent authorities.
5. Other objectives
Other objectives in the paper include proposals on how the Government can support building consent authorities in delivering better building consent services, as well as how the building system can better respond to Māori building needs and aspirations.
Next steps
Submissions on the proposals in the options paper close on 7 August 2023, at 5pm.
MBIE will analyse the submissions received and work towards the next stage of the review, which is for it to advise Ministers on what options should be progressed as a priority. Following Government decisions on which changes to go forward with, the detailed design of the chosen options will commence. The next stages will be delivered over the course of 2023 and 2024.
If you have any questions on the building consent system review, or would like any assistance in making submissions, please get in touch with the contacts listed or your usual Bell Gully adviser.
1 https://comcom.govt.nz/about-us/our-role/competition-studies/market-study-into-residential-building-supplies