The Government has announced that it will introduce new regulations to the Building Act 2004 to make it easier to make minor changes to building consents [1]. In short, these changes will mean that New Zealanders will no longer be required to apply for new consents for minor product and design changes. Building and Construction Minister Chris Penk says that the increased flexibility will help reduce delays and lower the cost of building.

Background

This announcement marks the latest of a series of changes introduced by the coalition Government aimed at making construction projects easier and more cost efficient. The Government has also recently announced that it will:

• Enact new legislation to enable the use of building materials from trusted overseas jurisdictions (with an initial focus on Australia), without the need for new products to be certified domestically. The Government expects that these changes will ultimately increase the availability of building products and contribute to lowering the cost of building in New Zealand. [2]
• Exempt small building projects under $65,000 from paying the building levy; and
• Require councils to submit timeframes for building consents applications.

The construction data from Stats NZ shows that it takes an average of 569 days to build a home. This number increases to nearly 600 days if the building consent processing time is included.

Minister Penk says that unclear and inflexible regulations add unnecessary time and delay to the build process. For example, if it becomes necessary to swap out a comparable building product because of a supply shortage, then New Zealanders must submit a new building consent application. Otherwise, they need to wait until the specified product becomes available, which causes delay and increases costs.

Construction projects are relatively more exposed to risks of delays arising from material shortages and supply chain disruptions. This is also exacerbated by the lack of market competition for building products in New Zealand. The GIB shortage experienced in 2022 was a notable example of this.

Proposed changes 

The Government intends to clarify the definition of ‘minor variation’ and introduce a new process of ‘minor customisations’ to allow changes to MBIE Multiproof Certificates. Building consent authorities will still need to assess building work to ensure it complies with the Building Code.

The Government has not provided details on what the exact changes will be, but has provided examples of the type of changes that would be permitted under the new legislation:

• replacing one brand of a product with a comparable product from a different brand;
• putting a window where a door was initially planned; and
• reversing a room’s layout i.e., to maximise sunlight or to work in with a specific landscape.

Building consent authorities will still need to assess building work to ensure it complies with the Building Code, but New Zealanders will not need to submit new consents for minor product or design changes.

Our views

Streamlining the building consent process was one of the Government’s priorities in its 100-day action plan, so the proposed reforms are not surprising. It is difficult to comment on the effectiveness of the proposed changes in the absence of specific details, but any changes that streamline the building consent process are likely to be well received amongst most industry participants. 

While many will consider the proposed changes as a positive step, it is important that the Government strikes the appropriate balance between making building easier and more affordable and ensuring that the objectives of the Building Act 2004 (specifically to ensure buildings contribute appropriately to the health of users) are appropriately provided for. It is important to remember the context in which the existing regime was developed – particularly, New Zealand’s historic problems with defective buildings. 

Key considerations for the Government will likely include:

• Comparable product: Setting the criteria to define a comparable product will be important to ensure that the substituted products are fit for their intended use or purpose. It is not clear what the criteria will be. For example, will there be a prescriptive list of comparable products or will “comparable product” be defined and open for the applicant to determine.
• Design changes: The government has advised that examples of minor design change include flipping the layout of a room or changing a window to a door. However, it is not clear how far this will extend. For example, would the door that replaces a window need to have similar dimensions? 

The Government has also committed to investigate options to reduce potential council liability in relation its role as a building consent authority under the Building Act [3], so it will be interesting to see what further changes will be announced. It will also be interesting to see how the latest announcement regarding streamlining the building consent process will impact on councils. For example:

• At what point will the applicant be required to notify the building consent authority of the change?
• What information will the applicant be required to provide to the building consent authority?
• Will the building consent authority have a discretion to refuse ‘minor changes’ in certain circumstances?
• Who will be liable for defects caused by substituted products or minor changes?

As noted above, this announcement is the next step in the Government’s ongoing commitment to make building in New Zealand easier and more affordable and we will follow further developments with great interest. 
 

References

1. 2 May 2024
2. MinterEllisonRuddWatts article, Building (Product Certification) Amendment Bill set to increase competition in building products market, 8 April 2024
3. Ministry of Business, Innovation and Employment, Briefing to the Incoming Minister for Building and Construction, November 2023, page 4.