Home > Our Publications > New Zealand Outlook > 2005 > August

Concerns rails over new building laws

NEW regulations ban public use of buildings and structures before they have been approved by council inspectors.

Rules introduced after the leaky-homes crisis also ban developers from selling homes or apartments before code compliance certificates - the final approval that buildings comply with the building code - are issue, unless both buyer and seller sign an "opt out" form.

The new Building Act rules also bring more paperwork, record-keeping and more stringent building inspections, which the property sector is warning will bring extra costs and delays in building projects.

Further down the track, but already causing concern to many in the building industry, are rules to take effect from 2009 that will require builders to be registered.

Certain work will then he restricted to licensed building practitioners or done under their supervision - a provision likely to have huge effects on New Zealand's do-it-yourselfers.

Property Council national director Connal Townsend says the industry supports the broad thrust of the act "but it's been incompetently prepared in a number of ways".

Causing the most angst to council members is section 363, which says a building intended for public use cannot be used while construction work is under way.

If the public use the building before a code compliance certificate is issued, the owner can be fined up to $200,000. Interim code compliance certificates will no longer be issued.

Mr Townsend says the new rules could mean that:

* An entire building has to be closed while construction work is carried out on one floor.

* Shopping centres are closed while a shop is affected by building work.

* Schools are shut whilst classrooms are built.

"That's nonsensical," Mr Townsend says. "That's patently not what was intended, but it's precisely what the section says."

The council is worried that local authority building inspectors are likely to take very conservative and risk-averse approaches to applying the section because of the lack of legal precedents. It wants the section to be reviewed immediately.

New Zealand Institute of Quantity Surveyors executive director John Granville is also worried about section 363.

"It appears to be going from under-regulation to over-regulation."

The new law affects all buildings in order to deal with problems that affect only a few, he says.

Lawyers Jeff Walters and Matthew Carroll of Chapman Tripp say the code compliance certificate regime changes mean that where a single building consent has been issued for a multi-unit development, all units will need to be completed before a certificate is issued.

A developer wanting to sell units in stages will have to apply for multiple building consents to cover each stage of the development - resulting in increased costs.

The ban on public use of buildings without a certificate is likely to significantly affect retailers, who will not be allowed to admit customers until after their certificate is issued, even if the building work is completed, the lawyers say.

The changes are also expected to require more inspections by local councils before they approve building work, creating both extra costs and delays in issuing certificates because of the increased pressure on inspectors.

"One accountancy firm has estimated that there is likely to be a three per cent increase to the overall consent process itself is expected to rise by 42.5 per cent," the lawyers said.

Provisional Wellington City Council figures show the building consent costs for a new $240,000 home could rise by $1075, while the cost for a new $8.2 million office or apartment block will increase by almost $19,500.

Council building consents director George Skimming says the increased council costs are to cover the extra time, paperwork and record-keeping that must be completed.