The council backed its submission to the Ministry of Business, Innovation and Employment’s (MBIE) review of the building consent system at its meeting yesterday.
The council questioned MBIE’s decision to not take feedback on "risk, liability and insurance" in the review, arguing that consideration of these issues was "integral" to the success of any national building reform.
The council’s annual report tabled yesterday showed the council made a $53.8m loss compared with a budgeted $96.1m surplus.
A large defective building claim settlement was the main reason for the deficit, the report said.
Councillors voted unanimously to approve the submission to MBIE.
Cr Esther Whitehead said she appreciated that the council was challenging MBIE on its position about liability.
"We’re trying to advocate for central government and MBIE to do the right thing and not put pressure on the ratepayer," she said.
Citing an increase in the number and scale of claims made by property owners over building defects, the council’s submission said it wanted Building Consent Authority (BCA) liability limited to 20% of claims.
"It is council’s position that requiring ratepayers to pay compensation where defendants are missing is unjust."
The report said the council was "not unsympathetic" to the need for losses to be recovered.
"Risk management is a shared responsibility.
"It is important that all participants in the system have clear accountabilities and not be able to escape their share of responsibility by ceasing to operate/liquidating."
The council wanted proportionate liability where roles and responsibilities of the parties involved would be encouraged to manage the risk along with warranties and insurance.
The council said the review had been set up by MBIE to make the system streamlined and more efficient but unless risk and liability was addressed councils would continue to be cautious.
"The settlement of large defective building claims has led to higher borrowing and interest costs for QLDC," the submission said.
It said more costs were anticipated and more leaky building claims.
The annual cost of borrowing required to fund settlements made in the past two years was $5.3m and the increase in interest costs for 2023-24 was $4.4m, which had a rates effect of 4.03% for the year.
Ratepayers in the Queenstown Lakes district had an average rates increase of 14.5% this year.
The QLDC has faced a number of challenging building defect claims in recent years.
Last December, it made a confidential settlement with unit owners of Oaks Queenstown Shores Resort after they had sued the QLDC and other parties for $162.9m and in
2021, the council had paid $40m to settle a leaky-building claim of the Oaks Queenstown Club Suites.
