Building Regulatory System

This page describes the Building Regulatory System, its objectives and our qualitative assessment of it. It also lists the main statutes and changes to regulation either planned or in progress.

System description and objectives

The building regulatory system provides for the regulation of buildings, building work and various occupational groups in the building industry, and the setting of building performance standards.

Objectives

The building regulatory system seeks to achieve the following purposes, which are set out in the Building Act 2004(external link):

  • people who use buildings can do so safely and without endangering their health
  • buildings have attributes that contribute appropriately to the health, physical independence, and well-being of the people who use them
  • people who use a building can escape from the building if it is on fire, and
  • buildings are sustainably designed, and constructed, and able to be used in ways that promote sustainable development.

The Act also describes the accountabilities of owners, designers, builders, and Building Consent Authorities – all of whom have responsibilities to ensure that building work complies with the Building Code(external link), which is a key piece of regulation.

How the system works

Building work must meet certain requirements set out in legislation and regulations. These determine how work can be done, who can do it, and ensure that the system has adequate checks and consumer protection in place.

The requirements of the Building Act are performance-based, to allow development and innovation in building design, technology and systems. The Act applies mainly to the physical aspects of building work and establishes a framework for good decision-making, with checks and balances at each stage of the building or alteration process. The Act provides for:

  • requirements relating to building work (the Building Code and building control)
  • the functions of MBIE, Territorial Authorities, Building Consent Authorities (BCAs) and their accreditation
  • licensing of building practitioners
  • mandatory contracts and implied warranties for the benefit of consumers
  • defined responsibilities for owners, designers, builders and manufacturers/suppliers
  • guidance from the regulator.

A number of regulations provide detail for particular building controls.  This includes the Building Code, which sets the minimum performance standards buildings must meet.  It is set out in Schedule 1 of the Building Regulations(external link).  Other controls set out in regulations include prescribed forms, a list of specified systems, definitions of 'change the use' and 'moderate earthquake', levies, fees and infringements.

The Building Act works alongside other legislation affecting the building and construction sector, listed below in key statutes, and council bylaws.

A long-term building system strategy is in development, and is expected to be completed in 2019.

Ministerial portfolio and key statutes

Portfolio

Building and Construction(external link)

Key statutes

  • Building Act 2004
  • Chartered Professional Engineers of New Zealand Act 2002
  • Construction Contracts Act 2002
  • Engineering Associates Act 1961
  • Plumbers, Gasfitters, and Drainlayers Act 2006
  • Registered Architects Act 2005
  • Weathertight Homes Resolution Services Act 2006
  • Electricity Act 1992
  • Fire Service Act 1975
  • Resource Management Act 1991

Regulatory agencies and their roles

MBIE

MBIE is both the system steward and the central regulator.  Our role includes:

  • System leadership and oversight
  • Providing policy advice
  • Setting standards, including verification methods and acceptable solutions
  • Performance monitoring
  • Determinations
  • Training and education
  • Licensing of some professions.

Territorial Authorities (city and district councils)

Territorial Authorities are regulators in the building system and are responsible for:

  • Monitoring performance
  • Providing advice and guidance on systems and processes
  • Assuring compliance
  • Keeping records
  • Providing property information.

Building Consent Authorities (BCAs)

Most Territorial Authorities are BCAs.  BCAs issue building consents, inspect building work and issue notices to fix (further detail is provided below).

Registration Boards

The following registration boards supervise professionals in the building system.  The boards investigate complaints about conduct, hear appeals against licensing decisions and approve rules.

Ministry for the Environment

Administers the Resource Management Act, which is relevant to the building system because it regulates land use, including where building work can be done and the provision of infrastructure for the built environment.

Ministry for Housing and Urban Development

Responsible for policy work on community and public housing, residential tenancies, housing affordability, and urban development. Housing policy and programmes have a direct effect on the pipeline of building work and the standards of building work for residential dwellings.


MBIE is the lead policy advisor to government on the building regulatory system. It is responsible for advice on legislation and regulations, including the Building Code. The stewardship role requires MBIE to look across the system as a whole and provide advice on how to ensure the building regulatory system is high-performing.

MBIE is also the central regulator and manages the rules, procedures, and other key functions for regulating building work. It is responsible for:

  • reviewing and maintaining the Building Code
  • producing documents that show ways to comply with the Building Code
  • monitoring the performance of Building Consent Authorities and Territorial Authorities in the building regulatory system
  • investigating complaints
  • making determinations about disputes on certain building matters
  • aspects of occupational regulation of some professions.

MBIE’s central regulator role is prescribed in section 11 of the Building Act.

Within MBIE the building regulatory system functions are located across two business groups – Building System Performance and Consumer Protection and Standards. This structure provides an appropriate separation between the strategy, policy and system design functions, and the operational compliance, assurance and dispute resolution functions. A memorandum of understanding (MOU) sets out the respective roles and responsibilities of the two groups and establishes governance arrangements.

A Building System Steering Group, comprised of the relevant general managers across both business groups, is responsible for strategic oversight of the building regulatory system, and the following outcomes:

  • Achieving (and exceeding) the standards for the MBIE-wide objectives for regulatory stewardship
  • Delivering confidence in the building regulatory system to the Minister, co-regulators, the sector and the public
  • Applying  an appropriate risk lens to functions across the system
  • Performing its central regulator and stewardship roles with clear purpose, and with cooperation between participants for the benefit of the system as a whole.

Territorial Authorities and Building Consent Authorities (BCAs) are the frontline of the building regulatory system. They are co-regulators with MBIE, as they also perform regulatory functions, as outlined below.

The Building Act requires Territorial Authorities to keep records about all properties in their area, issue project information memoranda and certificates of acceptance, monitor compliance schedules and follow up notices to fix.

Territorial Authorities also have powers to address breaches of the Building Act. They can issue infringement notices or, in some circumstances, organise for remedial work to be done.

Territorial Authorities also have a role in managing buildings in their area after an emergency event.

Building Consent Authorities are responsible for:

  • checking that applications for building consents comply with the Building Code and issuing buildings consents
  • carrying out inspections to determine whether building work has been carried out in compliance with the consent and the Building Code, and issuing code compliance certificates certifying this
  • issuing notices to fix, which require a person to remedy a breach of the Building Act or its regulations
  • issuing compliance schedules, which set out maintenance and reporting procedures for specified building systems (such as cable cars or automatic sprinkler systems).

Most Territorial Authorities are BCAs. They may also contract these services out. Standards of performance are set out in the Building Act. BCAs’ performance against the standards is currently assessed by International Accreditation New Zealand (IANZ) on behalf of MBIE.

Collaboration and information-sharing between regulatory agencies

MBIE has a number of other regulatory functions that have relevance to compliance matters in the building system. MBIE has MoUs that document arrangements for sharing relevant information between regulatory functions when appropriate.  The MoUs relevant to the building system relate to regulation of:

  • Electrical Workers
  • Licensed Building Practitioners
  • Employment relations and employment standards, and
  • Tenancy standards. 

Regulated parties and main stakeholders

Regulated parties and main stakeholders include:

  • Territorial Authorities (city and district councils) and Building Consent Authorities
  • Professionals and tradespeople, including:
    • Licensed building practitioners
    • Electrical workers
    • Plumbers, gasfitters and drainlayers
    • Registered architects
    • Chartered professional engineers
    • Engineering associates
  • Building owners.

Processes for engagement with regulated parties and stakeholders

MBIE is supported in its engagement with the building and construction sector by a building advisory panel (BAP), established under section 172 of the Building Act. The BAP provides independent specialist advice on current trends and issues affecting the building and construction sector. Under the BAP’s terms of reference, members meet quarterly with the purpose of:

  • identifying emerging risks and opportunities to the performance of the sector, and advising on the regulatory response
  • providing strategic advice on current and emerging trends in building design, building technologies and other factors that may affect the building and construction system
  • providing leadership of the regulatory parts of the sector
  • ensuring MBIE’s work programme and priorities create a regulatory environment that supports, and drives innovation in, the sector
  • providing a channel for constructive dialogue between MBIE and the sector, and identifying critical stakeholders for engagement on specific initiatives.

BAP advice is complemented by other formal and informal ongoing collaborations with sector representatives and regulated parties; for example:

  • Building Code Technical Risk Advisory Group (BCTRAG): sector representatives meet at least twice a year to provide advice on technical risks and opportunities in the Building Code to inform the technical work programme and strategic direction.
  • Partnership with Engineering NZ: we collaborate with Engineering NZ to access technical expertise and develop strong relationships.
  • Participation at Building Consent Authority and Licensing Board fora
  • Regular stakeholder interactions to support user-centric design and best-practice consultation processes.

A Construction Sector Accord is being developed to establish and communicate a joint commitment between government and industry that will support the sustained transformation of the construction industry.  The Accord is being co-developed by government ministers and their agencies and an industry Accord Development Group made up of industry leaders from across the sector.  The Accord will set out the agreed vision for the sector, the outcomes we want to achieve and the priority work areas for action. It is a joint response to the challenges facing the sector which include skills and labour shortages, poor risk management, and unclear regulations and pipeline.  There will be a two-phase approach to developing the Accord—a high-level accord will be launched in April 2019, with a more detailed plan of industry commitments to be published in late 2019.

System's fitness for purpose

Effectiveness

System has some issues against criteria

The building regulatory system is complex, with intricate legal and institutional arrangements. MBIE has made significant progress in embedding an operating model to deliver an effective building regulatory system, and in implementing a framework through which the system as a whole and its interdependencies can be viewed. The 4 ‘P’s – People, Processes, Products and Performance –  are the lens through which MBIE analyses impact, prioritises the most vulnerable parts of the system and ensures outcomes for one area do not come at the expense of another.

MBIE’s work programme for 2019/20 has a focus on enabling and supporting the sector to respond to building system challenges (Building System Legislative Reform Programme, Building Code Delivery Framework, Construction Skills Action Plan), as well as defining the long-term strategy (Building System Strategy) and partnering with industry to transform and improve performance of the building system (Construction Industry Accord).

Efficiency

System has significant issues against criteria

The building regulatory system is broad and complex, with multiple compliance pathways making the system challenging to use. Management of the Building Code is being strengthened so it is regularly updated, sets clear minimum performance standards, and allows for sector innovation and best practice. Building Consent Authorities (BCAs) are held accountable for their performance against the standards in the Building Act through an accreditation process carried out via assessments by International Accreditation New Zealand (IANZ). MBIE is now monitoring and evaluating regulatory changes made in 2017 to improve performance and effectiveness of the BCA accreditation scheme.

Resilience

System has significant issues against criteria

The system’s performance-based design and multiple compliance pathways were intended to allow for flexibility and innovation. It is unclear to what extent this is the case in practice. There is not yet a clear pathway by which new or innovative approaches can become recognised as industry best practiceResearch was undertaken in 2018 with stakeholders in the building and construction Industry to surface user-centric and future-focused compliance pathway opportunities. The outcomes of this research will inform future work to improve the Building Code to make it future-focused and user-centric; enhance clarity, consistency and certainty; and enable system users to unlock productivity opportunities (through innovation and/or technology) while maintaining building quality and performance.

The system responds reasonably quicklycross-agency Construction Skills Action Plan, initiated in 2018, takes a future-focused approach to earthquakesensuring there is a supply of skilled people to meet NZ’s construction needs.

MBIE has addressed – and other specific events. We are still working to bed in some ofresearch is ongoing – the large-scale recommendations following the earthquakes, and is about to implement more.  New earthquake-relatedprone building legislation changesis being monitored and evaluated.

Fairness and accountability

System has significant issues against criteria

It can be difficult and costly for home owners to hold building practitioners to account if something goes wrong. The current building system legislative reform programme (set out in the next section) aims to address the balance of risk across the building and construction process, and seeks to better align the regulation of builders, engineers and plumbers with the risk and competence required for the work they do. This includes creating new offences and penalties where appropriate, and reviewing the level of penalties for existing offences, to ensure that there are appropriate checks and balances in the system.

Planned regulatory changes

The timeframes for improvements noted in this section are indicative and may change. We will review this information at least quarterly and update timeframes as required.

Matter name

Policy intent

Planned consultation

Status

Building System Legislative Reform Programme

Matter type: Bills

Amendments to building law to align with best regulatory practice, including strengthening the regulation of building products and occupations, reviewing the level of penalties for existing offences, and creating new offences and penalties where appropriate.

Public consultation on proposed changes is underway. Submissions close 16 June 2019.

Policy development work and consultation underway.

Construction Skills Strategy

Matter type:Legislative instrument and other

 

Amends the Building Act (2004) to implement policies to ensure the sustainability of the Develop and implement a cross-agency Construction Skills Action Plan to build the capacity and capability of the sector so that New Zealand has the construction workforce it needs, now and in the future.

The first phase of the Action Plan focuses on:

  • Leveraging government procurement

  • Establishing additional jobs and skills hubs

  • Growing construction careers and credentials

  • Expanding skills for industry

  • Mana in Mahi – Strength in Work

  • Changes to immigration settings.

Intensive and targeted engagement occurred in 2018

 

MBIE will continue to engage with the construction sector during 2019 on proposals for phase 2 of the Action Plan

Ministerial Group on the Construction Workforce overseeing progress of initiatives

 

Biannual Building Code Updates (June and November)

Matter type: Legislative Instrument

Actively managing the Building Code so that it is credible and up to date with sector innovations and best practice.

Public Consultation for June 2019 Update: 11 March – 5 April 2019

Public Consultation for November 2019 Update: 5 August – 13 September 2019

June 19 Update: consultation and analysis of submissions.

To publish final amended Building Code and compliance documents on 27 June 2019

Building Amendment Bill

Matter type: Bill

 

Amendments to  the Building Act 2004 to provide for managing buildings after an emergency event and investigating building failures.

 

Consultation completed

 

The Transport and Infrastructure Select Committee reported back to the House on 5 April 2019. The Bill is intended to pass in 2019.

Earthquake Prone Buildings: amendments to regulations for substantial alterations

Matter type: Legislative Instrument

 

Supporting territorial authorities to implement the system for managing earthquake-prone buildings.

Consultation completed

Developing final proposals for Cabinet decision, expected mid-2019

Building (Product Certification) Regulations – CodeMark improvement

Matter type: Legislative instrument

 

Amendments to the regulations will include changing:  

  • standards and criteria for accreditation assessments and audits of testing laboratories and product certification bodies

  • standards and criteria against which products are evaluated

  • information required to be provided on product certificates

Consultation completed

 

Targeted consultation on an exposure draft of proposed regulations in April/May 2019

PCO drafting for implementation in June/July 2019

Dam Safety

Matter Type: Legislative instrument

Establishing regulations to bring into effect the framework in the Building Act 2004 for dam safety management

Public consultation in May 2019

Seeking Cabinet approval to consult the public on proposed regulations.

Planned service and operational changes

The timeframes for improvements noted in this section are indicative and may change. We will review this information at least quarterly and update timeframes as required.

Electrical worker and licensed building practitioner fees increases

Following public consultation in 2018, fees for the Electrical Workers and Licensed Building Practitioners (LBPs) schemes were increased on 21 January 2019.

For LBPs the fee changes relate mainly to two key activities: licence applications and licence renewals. Assessment fees remain unchanged, and are based on the class of licence. As well as ensuring fees will be set at cost-recovery level, the fee structure has been simplified. LBPs will no longer pay an administration fee and will instead pay an annual charge when licences are renewed, this will comprise a licence renewal fee and an LBP Scheme levy.

The increase means that there will be increased resourcing for investigations of non-licensed building work, which will increase the effectiveness of the scheme in the long-term.

For electrical workers, fees are now comparable to those paid before 2013. The fee changes will ensure the scheme is fully recovering costs and is adequately funded. They also provide for streamlining of administration, ongoing support for increased professional development opportunities for electrical workers, and will make the fee structure fairer.

Building consent authority/territorial authority compliance

As the central regulator of the building regulatory system, MBIE’s role includes overseeing the performance of the building regulatory system’s frontline regulators – building consent authorities (BCAs) and territorial authorities (TAs). Where non-compliance is identified (either by the appointed organisation International Accreditation New Zealand (IANZ) or through other means), MBIE expects that BCAs/TAs will move quickly to address any issues, taking into account the potential for harm. MBIE has refreshed its compliance strategy for BCAs/TAs around three core compliance objectives:

  • Promote compliance
  • Develop a picture of risk using monitoring and analysis
  • Identify and respond to non-compliance

Implementation planning is underway, for rollout in 2019.

Investigation case management

MBIE is improving its investigations function with the implementation of a cross-regulatory systems case management system,TIKA, in the first quarter of 2019. This will reduce time and cost, and improve the quality of data and ability to access it through consistent tracking of cases and storage of evidence.

Last updated: 16 April 2019