Efficiency and cost of consenting is a constant source of ire within the construction sector. However, something has now changed. For the first time since the Building Act 2004 was enacted, a private building consent authority has been approved to operate in New Zealand. Rob Georgiou (senior associate) and Will Tasker (lawyer) of Auckland law firm Greenwood Roche summarise the process for approving private building consent authorities, and take a brief look at how it could impact the sector.
Introduction
In late May, the Government announced the accreditation and registration of the country’s first private building consent authority, Building Consent Approvals Limited (BCAL). At the outset, BCAL intends to work with “good, known and reputable residential developers and building companies only”.
By focusing on low-risk residential housing, BCAL (and the Government) believe it will free up councils to work on more complex and higher-risk projects, as well as commercial, retail and apartment buildings.
Accreditation and registration
The Building Act 2004 has technically allowed for private building consent authorities since its commencement in 2004. However, until now, the pathway has never been used by a private company.
Consentium, which operates as the building consent authority for Kainga Ora, is the only other non-territorial or regional authority to achieve registration as a building consent authority under the Act.
The process for becoming a building consent authority is set out in the Act. The chief executive of the Ministry of Business Innovation and Employment (MBIE) is empowered to register a building consent authority if the applicant:
• holds a current International Accreditation New Zealand (IANZ) accreditation,
• is from or is based in New Zealand,
• is a fit and proper person, and
• has adequate means to cover any civil liabilities that may arise.
IANZ is the entity appointed by the MBIE as the building consent accreditation body under the Act. It performs that role by conducting assessments and training to ensure building consent authorities meet the technical and quality assurance requirements specified in the regulations, which BCAL achieved in October 2024.
Beyond competence in the role, it is also essential that building consent authorities have the means to cover potentially significant civil liability claims. It is well established law in New Zealand that building consent authorities can be held liable by building owners for damages arising from negligent consenting, inspecting or certification work.
‘Last man standing’
In many cases, the building consent authority is the “last man standing”, and can be the only avenue a building owner may have for redress if things go wrong.
From a policy perspective, it would be unfair if certain building owners were left out of pocket simply because the developer of their home decided to consent and certify the building through a private building consent authority, rather than the territorial or regional authority.
The Act deals with this by requiring building consent authorities to have adequate means to cover potential civil liabilities as a prerequisite to registration. Private building consent authorities can achieve this by demonstrating they have a complying insurance policy or other arrangements for consumer protection (such as a bond or guarantor).
Impact on the sector
The industry has long complained that delays in consenting and certification have increased the cost of housing and reduced efficiency in the sector. BCAL’s registration introduces a new and alternative pathway for consenting and certification that has the potential to shake up the sector.
Given BCAL’s stated strategy of focusing on low-risk residential consenting work and working with established developers and builders, the biggest beneficiaries of its move into the market will be large developers and builders who can operate at the scale necessary to build multiple similar or identical homes, whether in a single development or across multiple locations.
No geographical constraints
One of BCAL’s key advantages will be its ability to operate nationally and, thus, not be constrained by geographical regions like territorial or regional authorities.
This will allow for the development of long-term relationships between developers and BCAL, and lead to the application of consistent standards and requirements.
The Government has welcomed BCAL’s registration with open arms as another step towards finally putting New Zealand on the road to solving its long-standing housing crisis.
