Licensing plan for developers

By HELEN TUNNAH, deputy political editor

A crackdown on property developers could force them to be licensed or take out insurance to cover faulty building work.

Commerce Minister Lianne Dalziel is considering more law changes to tighten building standards following the leaky homes crisis revealed by the Herald.

Already she has introduced legislation to review the Building Act and license builders, and now she has asked for submissions on a discussion document which proposes extending a licensing regime to property developers and speculators.

That could stop developers getting licences if they have refused to fix faulty work, been declared bankrupt or are unable to prove they are financially sound.

There will also be changes to insolvency laws, due in the next few months, introducing jail terms and hefty fines for developers who abuse company structure rules to deliberately avoid creditors.

Ms Dalziel told the Herald yesterday that the Building Act changes were aimed at improving construction standards, and now she wanted to improve consumer protection measures for home buyers.

"We think that there are some gaps," she said. "There are a range of measures we can undertake to bring developers into the loop."

The role of developers, architects and builders has been under debate over the leaky homes crisis.

The Herald revealed thousands of New Zealanders face extensive repairs and costs after their near-new homes were found to be damp, rotting and growing toxic mould.

Building law changes will cover building methods, competency and the materials which can be used - probably not untreated timber.

A new building code will also be drawn up.

The latest discussion document on developers has been released through the Economic Development Ministry, with public submissions to be made within a fortnight.

Proposals include licensing property developers, who would be defined in legislation and would include speculators who build properties for quick sales. Developers would be prevented from selling a house until it had been issued with a building code compliance certificate, aimed at protecting buyers who purchase a house off design plans.

A new disputes resolution procedure, with independent assessors, could be introduced to reduce the costs of home owners trying to get developers to fix defective work.

Ms Dalziel said licensing developers would allow people to see who was reliable on a register which would record financial details.

Proposals

* A property developer may be defined by law, and would include "spec builders".

* Property developers may be licensed according to their track record.

* Developers who skip their liabilities and refuse to fix defects would not get licences.