30 Jul 2012

Councils push for mandatory building warranties

8:50 pm on 30 July 2012

Two of the country's biggest councils are urging the Government to include warranties in new buildings laws to avoid a re-run of the leaky homes saga.

Wellington and Christchurch councils have made submissions to a Parliamentary select committee considering the Building Amendment Bill.

The building reforms before Parliament are designed to ensure the construction industry is more accountable for its work.

If passed, builders would be required to prove their track record before taking on a job and would have to fix defects within a year.

But local councils, who are picking up 25% of the leaky homes tab, are calling for the inclusion of a mandatory warranty scheme.

Home Owners and Buyers Association president John Gray says that would protect both consumers and local authorities.

Mr Grey says councils should not remain as the insurer of last resort because the builders or other parties have departed or are bankrupt.

Insurer Built-in provides warranties for builders and sub-contractors, but spokesperson Ben Rickard says he's not in favour of mandatory warranties.

"It's a good idea homeowners are made aware that it's available, and that they can make the choice, but to make it mandatory does interfere with the market.

"Maybe there are some jobs out there that an insurer wouldn't give a warranty to because they're too risky."

Mr Rickard says the warranties are called in on about 10% of the building work his company handles.

The Labour Party is supporting the call for mandatory warranties for building work.

Labour's building and construction spokesperson Raymond Huo agrees the bill falls short on protections for consumers, saying insurance-backed warranties are needed.

He says the bill should also be changed, to ensure the manufacturers of building materials are held accountable for sub-standard products.