Tighter rules will raise new-house prices 3pc

By KEVIN TAYLOR political reporter

Moves to tighten controls on the construction industry to combat leaky buildings will add about 3 per cent to the cost of a new house.

The Government yesterday announced changes including the establishment of a powerful body to better regulate the industry.

Last night the building industry welcomed the moves.

The new regulator will take over the functions of the Building Industry Authority and have expanded powers.

Commerce Minister Lianne Dalziel said in announcing the Government's decisions that a social and economic impact study showed the moves would increase the cost of building.

But "it will actually reduce the overall costs over time. The benefits will outweigh the costs."

About 20,000 houses are built in New Zealand each year, but many factors, including changes to construction materials and methods, have seen some suffer leaks resulting in costly repairs.

Ms Dalziel said overall industry standards would be improved by the changes.

"The idea of this is to design it right and build it right first time.

"I hope that we won't see leaky buildings built in the future," she said.

The new regulator, to come under a yet-to-be-determined Government department, would have powers to warn against or ban building products or processes, such as untreated timber or monolithic claddings, that have been a major factor in the rise of leaky buildings.

The Building Industry Authority is due in about a month to come out with decisions on much stricter limits on the use of untreated timber and various monolithic claddings.

In another major move, the Government will require building professionals - including builders, architects and designers - to be licensed and self-certify their work.

A new body, the Building Practitioners Board, will do the licensing and the system will take five years to implement.

Ms Dalziel said licensing was the "best protection" against leaky buildings.

In other changes, all councils and building certifiers - who approve new buildings - will be accredited and audited.

A bill amending the Building Act to incorporate the changes would be introduced in July.

Ms Dalziel said last month that the authority, which failed to respond to the leaky building crisis for four years, would disappear as a standalone organisation from next year.

She said the public had expected the Government to deal with the authority's failure to react to the crisis, but the "arm's-length relationship" had meant ministers had little direct influence.

Authority chairman Barry Brown supported the Government's plans yesterday.

"Not only will the proposed changes put in place a stronger set of building controls, but they will also clarify what the Government and consumers expect of builders and other industry participants," he said.

They would also allow the authority to take a more proactive role in monitoring and enforcing building regulations.

In moves to help consumers, the Government would provide standard clauses applying to all building design and construction contracts.

It would also develop a dispute resolution process for all disputes between homeowners and builders.

The requirement would not apply to minor building work under a yet-to-be-decided dollar amount.

Registered Master Builders Federation chief executive Chris Preston welcomed the changes.

A regulator would have the ability to "push the pause button" if an issue arose within the industry.

"Builders are not regulators or scientists," he said. "We would welcome the strengthening of the regulator's role. In doing so it means there's a lot more clarity for the builder."

Mr Preston supported the licensing regime, saying such a system was well-established in Australia.

Certified Builders Association chief executive Garry Shuttleworth said the organisation was formed in 1998 to self-regulate the industry, but it was now happening through Government intervention.

"We are delighted. It has happened a lot faster than we anticipated."

What the new law will do

* A more powerful regulator will replace the Building Industry Authority, which failed to stop the leaky building crisis.

* The new body will have the power to warn against or ban certain building products or processes.

* Building professionals will have to be licensed and meet standards set by another new body, the Building Practitioners Board.

* Councils and building certifiers will be accredited and audited.

* The changes will add about 3 per cent to the cost of a house from next year.