Building law review should include home warranty insurance

“The Government should include warranties in its building law review to avoid a repeat of the man-made leaky homes saga” says Labour associate spokesperson for Building and Construction Raymond Huo.

“The Building Act review must include a review of the current liability model and the introduction of an insurance-backed mandatory home warranty scheme, similar to those in some states of Canada and Australia.

“I support two of our largest city councils, Wellington and Christchurch, and a number of other submitters that have called on the Government to introduce a home warranty insurance scheme.

“As pointed out by the Home Owners and Buyers Association, if responsible parties for defective building work have either gone out of business, died or left New Zealand, the consumer is left exposed and faces having to cover the costs. Building law should be amended to offer greater protections.

“Oddly, the Local Government and Environment Select Committee that considered Building Amendment Bill (No 4), now before the House to be passed under Urgency, was forced to amend its report to the House. The committee and the public were led to believe that the Minister had referred the matters of both joint and several liability and a mandatory home warranty scheme to the Law Commission for review. However, the Law Commission later informed the chair that mandatory home warranty had not been referred.

”For the general public, it does not matter as to who misled the committee, but I continue to urge the Government to refer this issue to the Law Commission and establish a system that provides meaningful and effective protections and guarantees for consumers and consenting authorities.

“We must legislate to prevent a repeat of the leaky building saga, especially in light of an imminent construction boom in parts of the country. New Zealand consumers deserve protection and the Minister needs to make sure the law ensures that contractors and suppliers will be held accountable.”

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