Government plans tight building rules

By FRANCESCA MOLD and ANDREW LAXON

The Government is considering new rules that would force builders to take out insurance protecting the owners of leaky houses if the builders' businesses failed.

It has asked officials to investigate the possibility of a new compulsory homeowner protection insurance scheme as part of a review of the Building Act.

Internal Affairs Minister George Hawkins gave details of the plan to dramatically tighten building rules at a parliamentary inquiry into the leaky buildings crisis yesterday.

His release of a possible law change was a pre-emptive strike against an expected grilling by Opposition MPs about his handling of the crisis.

Mr Hawkins said he had asked officials to report on whether a compulsory insurance scheme should be part of the regulatory system and what the costs and benefits would be.

The Master Builders Federation, which already operates a guarantee scheme, and the Consumers' Institute, which raised the idea in a submission to the inquiry, would both back compulsory insurance.

Consumers' Institute director David Russell said that while builders should do their job properly in the first place, the insurance would act as a backstop.

But he warned that the scheme would not be retrospective, so homeowners who already had problems would not be covered.

The chief executive of the Master Builders Federation, Chris Preston, said that overseas schemes showed the cost could be up to 2 per cent of the price of construction.

He would be concerned if the Government got involved in managing a scheme and said it had to be done on a commercial basis.

Insurance Council chief executive Chris Ryan said insurers had no strong views for or against the plan, but wanted to know if the Government would pay the bills of builders who failed to take out the compulsory cover.

He said the previous National Government had acted as insurer of last resort for companies that chose not to take privatised ACC cover.

Mr Hawkins spent almost 20 of his 45 minutes at the select committee hearing reading details of the decision to extend a review of the Building Act and to tighten regulations.

At one point, National Party housing spokesman Wayne Mapp interrupted, saying the minister was wasting time in an attempt to avoid questioning by Opposition MPs.

Dr Mapp said Mr Hawkins was continuing to duck responsibility for the leaky homes crisis.

He pointed to a letter Mr Hawkins had sent the Building Industry Authority in March, detailing the need to "exercise judgment and political awareness".

"You have completely failed to exercise that same judgment," said Dr Mapp.

"Not at all," replied Mr Hawkins.

The minister said the Government had developed a plan to help the "poor people" who had leaky homes.

That plan included an agreement in principle that draughtspeople, engineers, builders and architects should be regulated. Building certifiers and inspectors would also be accredited.

Legislation should pay more attention to building practices that protected consumers, he said.

It should give more guidance on the role of local authorities and building certifiers, including a definitive test for Building Code compliance.

The Government had also asked officials to look at whether people should be stopped from living in a house until it had been issued with a code-compliance certificate.

The Building Industry Authority - condemned for failing to warn the Government of the leaky building crisis - would be revamped.

The new weathertight homes resolution service might also be made permanent and its role broadened.

* If you have information about leaking buildings,
email the Herald or fax (09) 373-6421.

Herald feature: Leaky buildings

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