On 28 April 2025, the Government announced a new scheme which will enable trusted builders to sign off on their own work. The scheme will also set a mandatory target to tackle building inspection wait times, requiring Building Consent Authorities (BCAs) to complete 80 per cent of building inspections within three working days.¹

In support of the scheme, Minister Penk referred to builders frustrated with a “slow and overloaded” consent system, and to New Zealanders stung by mounting costs during wait times for consenting. The Government has positioned the reform as a “common-sense change” which will “cut building costs without sacrificing quality”. However, achieving the latter aspiration requires careful planning. One does not need to venture far into New Zealand’s history to find examples where self-certification has failed homeowners. Self-certification was at the heart of New Zealand’s infamous leaky building crisis.²

So far, we know that the right to self-certify will be reserved for “proven professionals who meet strict criteria”, that self-certification will be on an opt-in basis, and that it will only be available for work on “simple residential dwellings”.³ However, this leaves much uncertainty to be addressed. What will be the criteria for recognition as a ‘proven professional’? How will compensation for wrongful certification be achieved under the new regime? Most importantly, is it actually possible for this reform to avoid the pitfalls of our not-too-distant past?

Underlying policy concerns

In a 2024 cabinet paper preceding the announcement, Minister Penk connected the planned reform to the Government’s “Go for Housing Growth” policy and its commitment to increasing the housing supply generally.⁴ The stated aim is to make it easier and more affordable for New Zealanders to build houses. However, the policy issues underlying self-certification go beyond a simple exercise of cutting red-tape. A core issue here is who bears the risk for defective building work.

Under the present regime, local councils are responsible for building certification and can be held liable for certifying defective building work, just as the contractors who carried out the work are liable. Without proportionate liability legislation in New Zealand, joint and several liability means the owners of improperly constructed buildings will tend to recover losses either through equal contributions from the various parties responsible or typically, if the builder and other responsible parties go under, from the Council as the last one standing. A return to self-certification might take the councils out of that picture.

There are competing views about who should bear the costs in a defective building situation. Local councils have understandably expressed dissatisfaction with the status quo, which sees councils (and, by extension, ratepayers) regularly paying out millions in damages. Auckland Council has previously called for a move to proportionate liability.⁵ This would cap a council’s liability proportionate to its role in enabling the defective building. The major consequence of such a change is that homeowners would be left to deal with the balance of the damage, should they discover all other responsible parties have wound up. If the government’s new certification regime removes the role of local councils altogether, the risk will be even greater for homeowners, who will now be entirely reliant on their ability to claim from the builder, or insurance. This would almost certainly raise the costs of insurance and by extension, the build.

What went wrong last time?

It is worth re-capping on the causes of New Zealand’s leaky building crisis. It was the result of several independent but intersecting factors.⁶ From a regulatory perspective, the early 1990s exhibited a marked shift away from prescriptive guidelines and towards performance-based standards. This development was achieved through the Building Act 1991, which favoured self-regulation (through private certifiers)⁷ and opened the way for new methods of building in New Zealand. The 1991 Act did not, however, provide meaningful mandates on how builders were to achieve compliant building. In fact, explicit guidelines for building were removed from the legislation.⁸ At the same time, the government scrapped building apprenticeship schemes, creating a gap in the pathway for new builders to get adequate training.⁹

In a more technical sense, the crisis was caused by inadequate practices in the industry and the adoption of both designs and building materials which were foreign to the New Zealand market and not properly tested under New Zealand’s conditions.¹⁰ These issues proliferated under the new regulatory environment, which had failed to set-up practical safeguards for the building process itself. Meanwhile, the introduction of private certifiers created inevitable conflicts of interest, where certifiers were incentivised to overlook inadequate building in the interest of maintaining business relationships. These factors together created an environment ripe for professional negligence and inadequate oversight.¹¹

As aforementioned, it is possible today for homeowners afflicted with leaky buildings to sue both the contractor responsible and the local council that certified the work. However, this was not the case prior to the Building Act 2004, when certification was carried out privately. As the scope of the damage became apparent, successive governments had no choice but to explore a series of legislative responses and bail-outs to address widespread harm experienced by ordinary New Zealanders.¹² The phrase ‘leaky building’ came to be intrinsically associated with one of the worst systemic failures in the history of New Zealand infrastructure.

How might we make self-certification work?

In considering the return to self-certification, there are two key issues that should be top of mind. The first is oversight. The second is compensation.

The Building Act 2004 retains the core policy of performance-based standards.¹³ However, the regime provides a backstop to catch negligent building, through the involvement of local councils. Giving builders a power of self-certification will inevitably risk new conflicts of interest emerging, because no contractor really wants to conclude their own work is non-compliant (and have to fix it at their own cost). The planned reform would be wise to address the oversight issue, in a way the 1991 reform did not. Oversight might be achievable, for example, by retaining local council involvement in the form of a more streamlined, yet still robust quality assurance process. Such a process might involve random spot-checks on self-certified work backed by appropriate disciplinary responses for false certifications.¹⁴ 

In any event, the issue of compensation should also be addressed proactively. Even with a robust system of oversight, a return to self-certification necessarily increases the risk that inadequate building slips through. The new regime will ideally address that risk, by signalling a clear pathway for affected homeowners to pursue compensation. If local councils are not on the hook for these buildings, then the legislation may need to contemplate minimum requirements with respect to professional indemnity insurance. It is unclear whether such an approach would be viable in the current market , but letting the risk lie where it falls could be financially disastrous for homeowners, who are perhaps the least equipped to manage the risk. Building defects can often lie dormant for many years and, in the meantime, the contractor responsible may have wound up their business. The new scheme should anticipate such a worst case scenario, if the government wishes to avoid a legacy of systemic building failures and costly bail-outs.

This article was written with the assistance of Matt Murray, Law Graduate in our Major Projects and Construction team.

1. Hon Chris Penk “Accelerating building projects with self-certification and inspection targets” (28 April 2025)
2. Brian Easton “Regulatory Lessons from the Leaky Home Experience” (May 2010) and Oliver Stephenson “Déjà vu: the confluence of errors that led to the leaky homes crisis"
3. Hon Chris Penk, above n 1.
4. Hon Cris Penk “Exploring options for self-certification of building work” Cabinet Paper (29 October 2024)
5. Steve Forbes “Auckland Council still facing $200m bill for leaky buildings" (7 October 2021)
6. Stephenson, above n 2.
7. Building Act 1991, pt VII.
8. Stephenson, above n 2.
9. RNZ “Our leaky buildings saga is a long way from sorted” (22 November 2019)
10. Stephenson, above n 2.
11. Stephenson, above n 2.
12. Ministry of Business, Innovation and Employment “Weathertight homes – a bold response to regulatory failure” (n.d.) and see, for example Maurice Williamson “Government announces leaky homes package” (18 May 2010)
13. Building Act 2004, s 3.
14. Sarosh Mulla “National consent before self-certification” (5 November 2024)