Beware unintended consequences. That’s our take on the MBIE building consent system review process and the tension between risk and liability for BCAs and consenting councils.
The review process itself attempts to sideline the risk and liability issue as a non-event, but for the BCA’s nothing is more important. Several reports in the media this week have suggested Councils are too risk averse, which is holding up the consent system.
For decades, councils have been petitioning MBIE to shift the financial liability for things going wrong from themselves to a proportional approach with the other players in the sector. Understandably, the sector is not keen to change. Why would they? Currently, councils can ultimately be liable for all issues that arise with buildings and materials that they have signed off and that’s the way many would like it to stay.
What does this mean for you?
If the review was to lead to liability being shifted to other players in the industry, the effect is obvious – higher insurance premiums, and more risk on developers, designers, builders, and suppliers.
But what if we keep the status quo? If councils continue to bear the burden of risk, will they become ever more risk averse – adding complication to the consent process, stifling innovation, and making it harder to get compliance? This is the outcome no one wants.
We are all already seeing signs of this with the downturn in building consent applications; as the pressure on compliance staff reduces, they have more time to request/expect more precision at every stage of the consent process to reduce their risk.
Council continuing to shoulder all the liability for future risk could mean interpretation of the building code getting more complex and potentially being harder to comply with, which is potentially bad for the sector, councils, and the country.
Right now, MBIE has asked the sector what is important in our building consent process, and what we want it to look like. But, if we continue to ignore the liability for risk, we might all need to be careful what we wish for.
Disclaimer: This publication is general in nature and should not be used as a substitute for legal or other professional advice. Please seek specific professional advice before acting in relation to any statement contained in this publication.