Insurance rise forces certifier out

By ANDREW LAXON and AUDREY YOUNG

Another Auckland building certifier is closing its doors in the face of huge insurance premium increases caused by the leaky building crisis.

Papatoetoe-based Rob Woodger Ltd, which has about 400 Auckland homes on its books, will shut on May 1.

Manager Rob Woodger said he had seen the writing on the wall as several other firms either lost insurance cover or were forced to hand a large part of their business back to councils.

Business was already declining as the industry lost confidence in inspections by private certifiers and he expected the firm would make a loss this month.

Mr Woodger said he was announcing the closure now to avoid the chaos caused last October when the Building Industry Authority forced Auckland's second-biggest company, A1 Certifiers, to shut down immediately for lack of coverage.

Builders could choose either to carry on with his firm or switch to the local council now. He expected the company could finish most jobs by May 1.

Last week, the Herald revealed that at least six certifiers and house inspection firms have closed down, as insurers refuse coverage because of the leaky building crisis.

Premiums for two of the biggest certifiers have soared from $20,000 to $177,000 for Approved Building certifiers and from $50,000 to $270,000 for Nationwide.

Nationwide general manager Ray Kitney, whose company's cover has shrunk from $10 million to $1 million, said the new terms could put his company under.

Building surveyors, who carry out pre-purchase inspections for home buyers, are also losing their insurance but are trying to pass the legal risk on to their customers.

The Consumers Institute says this is illegal.

Some builders and architects are also losing cover for leaky buildings.

As a result, the Government is considering a levy on the whole building industry to create a new insurance fund - a plan which could involve the Government chipping in tens of millions of dollars.

Commerce Minister Lianne Dalziel said the idea would be considered as part of a review of the leaky buildings crisis next month.

She expects a discussion paper on the proposals within three weeks.

In a speech in Wellington yesterday to subcontractors, Lianne Dalziel said that the proposals would include:

* Expanding the Building Act to include consumer protection.

* Strengthening the roles of building regulators.

* Setting benchmarks for acceptable building products and practices.

* Registration of qualified building professionals.

* New options for consumer redress.

She said that registration might apply to a range of groups in the building industry.

"We're not just looking at occupational regulation up front for the builders but we're also looking at issues of accreditation for those that check the work of builder as well."

Lianne Dalziel said she would not rule out transforming the Weathertightness Homes Resolution Services set up to deal with rotting homes into a broader body.

"The door is definitely open on the different ways that we could adopt to provide the consumer protection which has been missing."

Lianne Dalziel assumed responsibility last year for the Building Industry Association and Building Act issues from Internal Affairs Minister George Hawkins following the rotting homes scandal.

* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Herald feature: Leaky buildings

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