July 29, 2015 2:00pm by David Farrar

Building consents

The Government is looking at ways to boost the private sector’s role in issuing building and resource consents.

At the same time it is eyeing ways to limit councils’ liability and ensure consumers are protected if builders fold to avoid paying for dodgy buildings.

Speaking to delegates at National’s annual conference in Auckland on Saturday, Housing Minister Nick Smith said a house typically costs about $500,00 to build, but councils would only receive about $10,000 in fees – equivalent to about 2 per cent of the revenue from the house.

But when a building was faulty they had to pay on average about $200,000 towards the fix-up and may be “pinged” for the full cost.

“By comparison the building sector gets the bulk of the revenue from a building project but is not paying its fair share of the liability,” he said.

“The building and construction companies are regularly winding their companies up under limited liability and avoiding that responsibility. And under joint and several liability it falls on the councils.”

That was why councils had been “so pedantic and conservative” about processing building consents, so they were not exposing themselves to liability. That in turn meant there were few private providers issuing building consents, even though they could under current law.

He said in Australia about 90 per cent of building consents were issued by the private sector and he wanted more competition and choice here.

We definitely want choice and competition between consenting authorities. That will incentivise them to act quicker and keep costs down.

The competition doesn’t have to be just private sector. One can have competition between Councils. When Christchurch lost its consenting authority, other Councils stepped in. The Council that draws up the rules doesn’t have to be the Council that issues consents under those rules.