Source: Radio New Zealand
All three-storey homes, and any alterations costing $100,000 or more, will be required to get a home warranty under indemnity changes under the Building Act.
Architects, engineers and other building design professionals will be required to have indemnity insurance, and fines for Licensed Building Practitioners will also be doubled.
In August, the coalition government announced it was changing the building consent system to ease the liability load on local councils and speed up consenting.
Under reforms through the Building Amendment Bill, expected to be introduced in early 2026, councils will no longer be the last man standing dealing with building defects. Instead, under “joint liability”, each party will be responsible for repairs for their share of the work.
There have been concerns raised that under the new regime owners could be left vulnerable to costs if parties – such as the builder – disappeared.
On Monday, Building and Construction minister Chris Penk revealed the new consent system would require professionals contributing to building design – such as architects and engineers – to hold professional indemnity insurance.
It will also be mandatory for all new residential buildings three storeys and under, and for renovations over $100,000, to have insurance that covers a one-year defect period and a 10-year structural warranty period.
Building and Construction Minister Chris Penk. RNZ/Marika Khabazi
Disciplinary penalties for Licensed Building Practitioners (LBPs) will increase from a maximum fine of $10,000 to $20,000, and the maximum suspension period will increase from 12 months to 24 months.
“Home warranty schemes are already widely available across New Zealand, and the sector has assured me it can scale to meet new demand, allowing consumers to shop around to find coverage best suited to their build,” Penk said.
“Requiring professional indemnity insurance for building designers ensures these professionals are financially able to stand by their work, giving building owners confidence. This requirement does not extend to other building trades.”
Penk said these measures provided strong protections for the reform, while boosting consent productivity.
Earlier, the Insurance Council of New Zealand said there could be challenges for insurers with the new approach, and it looked forward to further discussions with the government.
A property lawyer had told RNZ it was not clear who would underwrite the insurance – highlighting that insurers had been reluctant in the past to insure for weather tightness defects.
Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand
