Changes to building liability will help unlock housing growth - LGNZ

Local Government New Zealand (LGNZ) says changes to the building consent system, as signalled today by Minister for Building and Construction Chris Penk, will help speed up building consenting on new homes.

The Government is proposing to scrap the current approach to liability, replacing it with proportionate liability — which means each party will only be responsible for the share of work they carried out when defective building work is identified.

Proposed changes to the Building Act 2004 will also enable voluntary consolidation of Building Consent Authorities (BCAs) into Regional BCAs to replace the 66 district and city council BCAs currently in place. The Government expects to introduce a Bill to Parliament in early 2026.

LGNZ President Sam Broughton says that the changes will be welcomed by councils — and are long overdue.

“We congratulate Minister Penk and MBIE officials on engaging with LGNZ and councils positively, and for getting such a significant change over the line. We’ve been lobbying for this to change since 2019,” says Sam Broughton.

“Local and central government are strongly aligned on the need to streamline rules and processes to deliver economic growth, and this starts with housing growth.

“Under the current system, councils are often left ‘holding the bag’ if something goes wrong with the finished building. This means ratepayers bear a disproportionate and unfair amount of risk and cost, and this has driven an overly cautious approach to consenting from councils.

“We strongly believe it will have an instant and positive impact on housing growth; councils will be in a better position to consent more efficiently, with less legal risk borne by local government — and therefore less risk for ratepayers.”

Sam Broughton says that councils will also welcome changes to the BCA system.

“Councils have been calling for changes to the BCA system to allow them to more easily consolidate services and share resources, to reduce costs for ratepayers. Some councils have already done this, and we hope the new system will make it easier for others to follow suit.

“We know that councils play a vital role in housing growth, despite an imperfect system that has often put unnecessary burdens on local government. The changes signalled by Government today will effectively ‘unshackle’ councils and allow them to process building consents at pace.”