30 May 2016

Builders warn of shortage with guarantee plan

5:45 pm on 30 May 2016

Builders are worried many will drop out of the sector if plans to require them to guarantee work go ahead.

Christchurch Construction.

Christchurch Construction. Photo: RNZ / Alexander Robertson

Building and Housing Minister Nick Smith is considering the move as a way of protecting homeowners against shoddy work.

The Registered Master Builders Association already provides warranties for the work of its members.

Its chief executive, David Kelly, said requiring all builders to provide warranties needs to be thought through carefully.

"The danger is if they can't, then either they'll go out of the business or they'll build without guarantees and then they'll fold their company and the homeowner can be even more exposed."

But Building Industry Federation chief executive Bruce Kohn said forcing builders to guarantee their work would mean more assurance for home owners. The federation represents suppliers of building products.

"Insurance companies who will be backing the warranties will want assurance of the product and quality of the builder."

The idea has also won support from the Institute of Building Surveyors. Spokesman Nick Batchelor said the idea has merit.

"Having another warranty is definitely a good idea because it puts more onus back on the builders."

He said owners were still protected under the 10-year long guarantee.

"But more accountability for the builders and people carrying out construction work is definitely a good idea."

Speaking at the Certified Builders Association conference in Wellington last week, Dr Smith said a fairer system for liability was needed.

Currently councils could end up with much of the liability when things went wrong, while receiving only 1 to 2 percent of the profits from construction work.

Dr Smith has said he plans to put out a discussion paper on the issue later this year.

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