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Call for Building Warranty Scheme

18 Jun 2017

Auckland mayor is throwing his weight behind a Mayoral Housing Taskforce Report recommendation for central government to investigate introducing a building warranty or insurance scheme.

The report says the move could speed the consent process by reducing risks for local governments, removing a barrier to housing supply keeping up with population growth.

As New Zealand has no builders’ warranty schemes, local governments often holding ultimate liability for defects as the “last person standing” with deep pockets.

This means councils can be reluctant to approve new building materials and techniques without significant testing and assurance.

“Transferring liability away from councils could enable more innovation, reduce costs for councils and builders and improve the certainty of consenting processes,” the Mayoral Housing Taskforce Report says.

“An alternative to the current approach would be to use warranty and insurance schemes, backed by appropriate quality assurance by builders and insurers, to address liability issues.”

Examples highlighted include the schemes operating in NSW, Queensland and the UK.

Legislative change or other market arrangements may be needed to move ahead with a proposal, it says.

The report recommends Auckland Council invite the Government to lead on the issue, with engagement across the construction, industry, insurance and banking sectors.

Mayor Phil Goff established the taskforce early this year, asking it to identify barriers to building new homes in Auckland at a speed and scale needed to meet demand.

Auckland’s population is expected to increase by up to 1 million people over the next 30 years, and Mr Goff says housing in the city has become unaffordable for first home buyers and renters.

 

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