New licensing system for building sector

Building Issues Minister Clayton Cosgrove today announced a licensing programme to recognise skilled builders while still protecting New Zealand's Do-It-Yourself (DIY) culture, and increasing consumer protection.

The announcement follows extensive consultation with the building sector and stakeholders.

"New Zealanders have a right to expect building work to be done properly the first time. This new licensing system will set benchmark national standards, which skilled building practitioners must meet to be able to undertake significant work," said Mr Cosgrove.

"While most builders are reputable, there are some providing a poor service. This system will make it harder for these cowboys to operate, and will improve consumer confidence in the industry."

"Builders without a licence will still be able to undertake a wide range of construction work, but significant work will have to be supervised by a licence holder," said Mr Cosgrove.

Mr Cosgrove said the government's commonsense approach protects the Kiwi DIY tradition.

"Unlicensed people will still be able to carry out most of the work they now do around their home. For example, a farmer will still be able to build a hayshed, or a homeowner build a deck, a garden shed or fit a new kitchen."

There will be 13 licenses classes created. Licensing will be progressively introduced over the next five years, with full roll out of the scheme by 2011.

People seeking licenses are likely to face an initial assessment cost of between $250 and $650, and the annual license renewal will cost up to $200.

The licence standards and assessment criteria will be established over the next year, and approved by the Building Practitioners Board. Industry will continue to be involved throughout the implementation process. The Department of Building and Housing will administer the issuing of licenses.

Mr Cosgrove said currently anyone can put on a tool belt and call themselves a builder, whether they are competent at their trade or not, so change is needed.

"This is an exciting time for the building industry. The licensed building practitioners regime will set a benchmark for quality and improve consumer confidence in the sector as a whole," said Mr Cosgrove.

BACKGROUND INFORMATION

Why is the Government introducing licensing?
The new licensing regime is designed to help ensure buildings are built right first time by setting quality benchmark standards for the building industry. There are currently low levels of formal training in the building industry. One third of builders have a formal qualification and for many specialist trades, the percentage is lower. At the same time there have been a lot of changes in the building industry including:

• changing consumer preferences
• more complex residential buildings being built
• more activity by developers building to on-sell
• more fragmentation of building trades and use of semi-skilled labour
• rapid development of new technologies, materials and systems
• less co-ordination between design and construction.

These factors have contributed to significant building failures, notably leaky buildings. The licensing system aims to improve the quality of buildings and increase consumer protection by:

• setting national standards for people carrying out certain design and building work
• helping consumers identify who are licensed building practitioners
• ensuring design and building practitioners are accountable for their work.

How many licensing types and categories will there be?
13 building licence classes will be progressively introduced for people working in certain areas of design and building work. There will be 3 design and 3 site licenses based on three categories of building complexity where:

• Category one is for straightforward houses, such as basic brick and mortar, or weatherboard houses
• Category two is for moderately complex commercial or residential buildings. For example a two-storey monolithic cladding house.
• Category three is for large or publicly important buildings such as high-rises and
  Hospitals

There will also be seven specialist and trade licenses covering concrete structures, steel structures, building services, carpentry, external plastering, roofing, and brick and block laying. These will apply to all building categories. The Department of Building and Housing will oversee the issuing of licenses.

When will licensing start?

• November 2007: Voluntary licensing for designers, builders, and carpentry
• From 2008: Voluntary licensing for remaining licences start to be introduced
• November 2009: Mandatory requirement to use design and site licensed building practitioners
• From November 2011: Work on the structure and envelope of buildings will need to be undertaken or supervised by practitioners with the appropriate licence.

How many people will be licensed?
It is anticipated around 28,000 people will become licensed building practitioners (LBPs). This is about 19% of the current building sector workforce. People without a licence will still be able to undertake a wide range of building work. However work classified as being critical to the health and safety of people using that building, must be supervised, or done by an LBP.

Skilled and experienced builders who do not have formal qualifications can gain licenses. However having formal qualifications will help provide good evidence that applicants can use in the assessment process.

What does the building industry think about licensing?
The industry has had a key role in developing the regime and is supportive of the approach being taken. Industry will continue to be involved as we work through the implementation process.

How does licensing help consumers?
Licensing sets benchmark standards. People who apply for a licence will have their name on a public register. Consumers will be able to check the register and use it to choose building and design practitioners who meet the national standards. Licensed professionals will be accountable for their work before the Building Practitioners Board.

What are the costs of licensing?
There are some costs for people wanting to become licensed that may be passed onto consumers. These include the cost of getting assessed, the cost of further training where necessary, and the cost of the licence itself. These costs are minor compared to the overall value of building work put in place each year and the costs when buildings fail.

Licensing will result in significant benefits, and ultimately, savings, to consumers.
Up-skilling the workforce means it will be better able to respond to future changes in materials and products thereby reducing the risk of future costly building failures. In time this should lead to reduced construction costs, and fewer delays and disputes.

The cost of having a licence hasn’t been finalised but it is estimated the annual fee will be around $100 to $200. In addition, the initial assessment cost is likely to range from between $250-$650, depending on how extensive the assessment needs to be.

Will people still be able to undertake Do-It-Yourself work?
Yes. Most of the work DIYers do today, they will still be able to do under the new regime. The only construction that will need to be supervised and certified by an LBP will be for:

• New buildings, intended for human residence, work or for public use.
• Change of use of buildings. For example converting an office into an apartment.
• Extensions and major alterations to existing buildings intended to be used as residences or workplaces or for public use.

All other building work can continue to be undertaken by DIYers without being supervised by a licensed building practitioner. For example, constructing a hay or garden shed, building a deck or installing a new kitchen. Even work that requires a building consent, such as decks higher than one metre or removing one internal structural wall, does not need an LPB.

What is the Building Practitioners Board?
The Building Practitioners Board is made up of building industry specialists with expertise in design, construction, inspection services, the law, dispute resolution, education and training. It will approve the rules for standards and assessment processes, hear appeals against licensing decisions and hear complaints against, and discipline, licensed building practitioners. The Board is appointed by the Governor-General on the recommendation of the Minister for Building Issues.

Further information is available at the Department of Building and Housing website, here: www.dbh.govt.nz

Full details of the new licensing system can be found here