For years, New Zealand’s building consent system has asked one group to carry a risk that was never theirs alone to bear.
Local authorities have effectively acted as the last line of defence for the entire construction sector, liable for the full cost of a defect even when their share of the fault was small. The predictable result has been a risk-averse consenting culture, slower approvals, and a system that has quietly discouraged the uptake of new building products and methods.
That is starting to change, and Property Council New Zealand has been at the centre of the push for reform.
Why councils became so risk-averse
Under joint and several liability, a council found even one per cent at fault for a building defect could be pursued for the full cost of remediation if other parties, such as builders or product suppliers, could not pay. It is easy to see why that setting made councils cautious. Faced with the prospect of being the last party left holding an entire bill, the rational response was to consent conservatively, scrutinise heavily and avoid anything unfamiliar.
Chief executive Leonie Freeman has described the effect plainly: joint and several liability has often left councils as the last man standing. It is a system that punished caution’s absence and rewarded caution’s excess, and the sector has been living with the consequences of that for years, in the form of delays, added cost, and a building system that struggled to adopt genuinely innovative products.
The shift to proportionate liability
Property Council supports replacing joint and several liability with a proportionate liability model, so that risk is shared fairly across everyone involved in the construction process, not concentrated on whichever party is left standing at the end. Spreading accountability more evenly across the construction pipeline should ease pressure on councils, giving them the confidence to consent efficiently rather than defensively, and it is a shift the development community has been advocating for.
To work well, this needs minimum insurance requirements sitting alongside it, so that professional indemnity insurance and home warranties give all parties, including homeowners, real protection when something does go wrong.
A national register to back better decisions
One of the underappreciated drivers of consenting delay is uncertainty about products themselves. When a building consent authority cannot quickly and confidently confirm that a material or system meets the Building Code, the safest option is to say no, or to ask for more information, or more time.
Property Council supports using the surplus already sitting within the building levy to fund a National Products Register, giving consent authorities a single, trusted source of truth on approved materials and systems. That reduces risk for the people making consenting decisions and removes a genuine barrier to adopting better, more innovative building products at scale.
Reducing fragmentation across building consent authorities
New Zealand currently applies the Building Code through what amounts to sixty-six different local interpretations, one for each building consent authority. That creates inconsistency and duplication for anyone building or developing across more than one region, and it means the same product or design can be treated differently depending on which side of a council boundary it sits. Property Council broadly supports the voluntary consolidation of building consent authorities as a step towards a more consistent and efficient building consent system.
Alongside this, the current appeal pathways for consent applicants are limited and costly, making it hard to challenge a decision or resolve a dispute efficiently. Independent, accessible and cost-effective appeal mechanisms need to be part of the same reform, so that applicants have a genuine avenue for recourse when a decision goes wrong.
What good looks like
Get this right, and the benefits flow through the whole system:
- a fairer allocation of risk, reducing delays and improving efficiency in consenting.
- greater certainty and consistency across the system, for councils, developers and homeowners alike.
- increased innovation and productivity in the building sector, supporting faster, higher-quality delivery.
Our recommendations
Property Council is recommending that government reform the consenting system by:
- shifting from joint and several liability to proportionate liability.
- establishing minimum insurance requirements.
- developing a National Register of Products.
- establishing an independent regulator for consent applications.
Leonie Freeman says the momentum behind these changes is real, and worth building on.
“Addressing both consenting and liability settings is a step in the right direction. Our members are open to sharing liability if it gives councils greater confidence and improves consistency, and a more consolidated approach to consenting has the potential to remove a lot of unnecessary complexity from the system. Taken together, these changes have real potential to remove blockages, reduce costs, and provide a more predictable system for everyone involved in the building process.”
Property Council will continue to work with government on the detail of these reforms as they progress, drawing on the feedback and expertise of our members to help shape our position. This work forms part of our broader push to deliver housing and communities New Zealanders can be proud of.