Building and Construction Minister Chris Penk on Monday announced the government would be making changes to the current building consent system that would ease the cost burden on ratepayers for defective building work.
Councils were hesitant to sign off on building consents and inspections because they could be held liable for all defects which would leave ratepayers to foot the bill, Mr Penk said.
Building owners could currently claim full compensation from any responsible party, and it was often the councils who ended up paying out.
"A case in Queenstown shows the scale of this issue.
"In 2015, the Oaks Shores body corporate filed a $160 million claim for weathertight defects.
"The developer had been placed into voluntary liquidation and was not sued, leaving ratepayers exposed to the entire claim.
"If the case hadn’t been settled privately, ratepayers could have faced rates increases of $300 a year for 30 years."
The government planned to scrap the current framework, known as joint and several liability, and replace it with proportionate liability — meaning each party would only be responsible for the share of work they carried out.
Councils would also be able to voluntarily consolidate the functions of their building consent authorities with one another, Mr Penk said.
Queenstown Lakes District Council (QLDC) planning and development general manager Dave Wallace said the council looked forward to further detail from the government regarding the announcement, including around timeframes.
"We hope the reforms will prevent similar weathertight claims against QLDC under the current joint and several liability where council is the ‘last man standing’."
When measured against metropolitan areas nationwide, QLDC consistently performed in the top three for processing building consents and certificates of compliance within statutory timeframes at over 95%, Mr Wallace said.
Over the past year, the council had achieved more than 96% of consents issued within statutory timeframes.
‘‘We will continue to work with our community to provide a helpful, efficient and effective service for our customers in this regard whilst we await further detail around the government’s recent announcement.’’
Queenstown Lakes District Mayor Glyn Lewers said the announcement was ‘‘a positive first step’’ in addressing the needs of the ratepayers of the region.
QLDC had been advocating for such reforms over the past decade, and the move to proportionate liability was a welcome one.
The region’s building consent numbers for new residential builds were already at the highest per capita in New Zealand, Mr Lewers said.
It was too early to tell if there would be any dramatic increase in the number of consents issued or final sign-offs for completed builds.
The council was already moving ‘‘at a serious pace’’ to address housing growth in Queenstown.
‘‘My view is that we will reach a point where the market capacity to build new residential homes will reach a limit rather than any constraint from the issuing of building consents from a Queenstown Lakes perspective.’’
Dunedin City Council acting customer and regulatory general manager Paul Henderson said its initial impression was the changes announced by the government appeared positive.
"The DCC was among councils calling for changes that reduced councils’ liability, especially for issues arising that are outside councils’ control, so it’s pleasing to see the government appears to have listened."
The council still needed to work through what the changes would mean at an operational level, but hoped they would make consenting more efficient, Mr Henderson said.
