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An FR guide to building regulation

on Tuesday, 17 September 2013. Posted in Latest Articles, Property

If you are in the business of constructing buildings, you need to ensure that you meet all of your obligations under the Building Act 2004. This Act was passed in response to the leaky building issues, and to provide greater regulation of the building industry generally.

The Building Act is designed to ensure that:

  • 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 designed, constructed, and able to be used in ways that promote sustainable development.

The Building Act aims to achieve these goals by establishing:

  • Strict guidelines for code compliance certificates, including (with some exceptions) providing that new buildings cannot be occupied until they have a code compliance certificate;

  • A new licensing regime for building professionals;

  • Strict requirements for commercial buildings;

  • A new warranty regime for residential dwellings; and

  • Penalties for failure to comply with the code compliance certificate regime.

Effects of non-compliance

The effects of breaching the Building Act can be severe. Fines can be up to $200,000 and increase for every day the breach continues. Furthermore:

  • Employers may be liable for offences committed by employees and other agents;

  • Directors may be personally liable for offences committed by their company;

  • Landlords may be liable for offences committed by tenants; and

  • Building owners can be liable for breaches committed by the building occupiers.

In addition to being able to impose fines, local authorities also have powers to close down or condemn buildings that do not meet the requirements of the Building Act. This can have a significant impact on businesses connected with that building, including the loss of rent or business profits and claims for breach of lease.

Local authorities also have the power to carry out remedial work on a building at the owner’s cost, or issue a notice requiring work to be rectified and other work to be stopped in the meantime. In respect to dangerous, earthquake prone or insanitary buildings, local authorities have the power to attach to the building a notice that warns people not to approach the building.

Your building compliance programme

If your business owns, develops or occupies a building you need to ensure that your business meets its obligations under the Building Act. The first step is to review your business’s existing position. This should involve checking existing consents, compliance schedules, leases, management agreements and other documentation. You should also establish a staff training and monitoring programme and incorporate regular property reviews into your business procedures.

If you co-ordinate these procedures with your compliance review of the Resource Management Act 1991 and the Health and Safety in Employment Act 1992, you should have a comprehensive compliance picture for your land and buildings. You will then be able to remedy any problems and plan for the future.

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