There are fears the Government’s proposal to change who is liable for shonky buildings risks leaving homeowners in the lurch.
The Government is proposing to prevent local councils from being lumped with big bills if they consent buildings that turn out to be leaky or defective.
NZ Herald Wellington business editor Jenee Tibshraeny reveals why homeowners have voiced concerns.
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Speaker 1 (00:09):
You're listening to a podcast from News Talks be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Now, there are homes that concerns rather that the government's
proposed building overhaul might leave homeowners in the lurch. Essentially,
what the government's doing is they want to remove some
of the responsibility for defective buildings from councils and instead
make the builders and the trades and so on responsible
for their work. But that is where the plan hits
a snag. Genative Traine as The Herald's Wellington Business editor
and with us Hello Jane, Hi, Heather. So in this case,
(00:39):
the trade's would have to be insured. But that's the problem,
right whether they can actually get insurance.
Speaker 3 (00:44):
That's the thing. So if you are shifting the liability
to the people who cause the problem, the trade's and
so on, that's all fair and well. But these tradees
don't necessarily have deep pockets. So if you have a
problem with your with your home, you chase your builder.
Your builder can say that we're liquidating the company, or
it can or the builder can just say, look, we
(01:05):
can't pay, we can't pay you. We're just two guys
and we can't pay you out, So then I guess
you go, well, hopefully the builder has insurance. All the
builders offered you some sort of guarantee, warranty or whatever
on the building work. The government is looking at when
it makes this change, it's looking at making these consumer
protections mandatory. But I spoke to someone from the insurance industry,
(01:29):
Stanford Insurance Director Duncan Colebrook. He's one of the guys
that provides this insurance cover for the builders, and he's saying, look,
we're not going to just ensure any old builder. You know,
they have strong underwriting processes, and of course insurance companies
don't want to lose money. They can't just ensure everyone.
(01:49):
So the insurance industry doesn't seem to be that keen
on what the government's proposing, because you know, they're not
going to provide blanket cover for every trade, every builder,
every building.
Speaker 2 (02:01):
So what's the alternative.
Speaker 3 (02:03):
Well, you know, this is all still being worked through,
but as it stands, it seems like there's a risk
that the homeowner will be exposed because if if it
is not entirely ensured, and the pockets of these builders
and things aren't that deep, then it could leave you
in the lurch. Duncan Colebrook, he from Stanford Insurance, said
(02:26):
to me, well, you know, if the government wants to
make the stuff mandatory, like consumer protections mandatory, then maybe
it needs to step in and provide some sort of
insurance cover. But you know that he made the point
that is the exact thing the government is trying to avoid.
You know, it's trying to get rid of their liability
on councils, which kind of comes back on the government.
(02:49):
So you're really it does leave you in a sort
of scratching your head. Another insurance Brokerray spoke to Ben Recard.
He said, well, you know, insurance are hesitant about providing
this kind of cover. You know, it's specialist cover because
normally an insurance company provides cover for a year, like
for your house, it looks at the risk, provides cover
for a year next year, reassesses changes the premium, does
(03:10):
it again. But this is this type of stuff is
for like ten years. Yeah, I know it's quite risky
ten years. There's some hesitancy there.
Speaker 2 (03:18):
But this goes some way to explaining why the government
only half announced the thing, right, because we were expecting
an announcement of yes, we're changing where the responsibility lies,
and this is what's going to back it up. But
we only got the changing of the responsibility, not the
backing up because it's too complicated.
Speaker 3 (03:33):
Well exactly. So the theory is nice, let's not cripple counsels.
You know, with the leaky home saga many years ago,
councils get left with this big bill, rate payers end
up paying for it. It sounds nice. We all like that,
make the bill, make the naughty people pay. But there's
some fundamental details there. You know. If the insurance industry
(03:55):
is not rushing in to say that's that's fine with us,
then I still have major questions of exactly how this
is going to work.
Speaker 2 (04:01):
Yeah, totally all right, let's see what they come up with.
We'll have to wait for Chris Pink to figure it out.
Thank you so much to know I appreciate it. Jenetib Shraney,
the Herald's Welling and Business editor.
Speaker 1 (04:09):
For more from News Talk st B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
You're listening to a podcast from News Talks be follow
this and our wide range of podcasts now on iHeartRadio.
Speaker 2 (00:16):
Now, there are homes that concerns rather that the government's
proposed building overhaul might leave homeowners in the lurch. Essentially,
what the government's doing is they want to remove some
of the responsibility for defective buildings from councils and instead
make the builders and the trades and so on responsible
for their work. But that is where the plan hits
a snag. Genative Traine as The Herald's Wellington Business editor
and with us Hello Jane, Hi, Heather. So in this case,
(00:39):
the trade's would have to be insured. But that's the problem,
right whether they can actually get insurance.
Speaker 3 (00:44):
That's the thing. So if you are shifting the liability
to the people who cause the problem, the trade's and
so on, that's all fair and well. But these tradees
don't necessarily have deep pockets. So if you have a
problem with your with your home, you chase your builder.
Your builder can say that we're liquidating the company, or
it can or the builder can just say, look, we
(01:05):
can't pay, we can't pay you. We're just two guys
and we can't pay you out, So then I guess
you go, well, hopefully the builder has insurance. All the
builders offered you some sort of guarantee, warranty or whatever
on the building work. The government is looking at when
it makes this change, it's looking at making these consumer
protections mandatory. But I spoke to someone from the insurance industry,
(01:29):
Stanford Insurance Director Duncan Colebrook. He's one of the guys
that provides this insurance cover for the builders, and he's saying, look,
we're not going to just ensure any old builder. You know,
they have strong underwriting processes, and of course insurance companies
don't want to lose money. They can't just ensure everyone.
(01:49):
So the insurance industry doesn't seem to be that keen
on what the government's proposing, because you know, they're not
going to provide blanket cover for every trade, every builder,
every building.
Speaker 2 (02:01):
So what's the alternative.
Speaker 3 (02:03):
Well, you know, this is all still being worked through,
but as it stands, it seems like there's a risk
that the homeowner will be exposed because if if it
is not entirely ensured, and the pockets of these builders
and things aren't that deep, then it could leave you
in the lurch. Duncan Colebrook, he from Stanford Insurance, said
(02:26):
to me, well, you know, if the government wants to
make the stuff mandatory, like consumer protections mandatory, then maybe
it needs to step in and provide some sort of
insurance cover. But you know that he made the point
that is the exact thing the government is trying to avoid.
You know, it's trying to get rid of their liability
on councils, which kind of comes back on the government.
(02:49):
So you're really it does leave you in a sort
of scratching your head. Another insurance Brokerray spoke to Ben Recard.
He said, well, you know, insurance are hesitant about providing
this kind of cover. You know, it's specialist cover because
normally an insurance company provides cover for a year, like
for your house, it looks at the risk, provides cover
for a year next year, reassesses changes the premium, does
(03:10):
it again. But this is this type of stuff is
for like ten years. Yeah, I know it's quite risky
ten years. There's some hesitancy there.
Speaker 2 (03:18):
But this goes some way to explaining why the government
only half announced the thing, right, because we were expecting
an announcement of yes, we're changing where the responsibility lies,
and this is what's going to back it up. But
we only got the changing of the responsibility, not the
backing up because it's too complicated.
Speaker 3 (03:33):
Well exactly. So the theory is nice, let's not cripple counsels.
You know, with the leaky home saga many years ago,
councils get left with this big bill, rate payers end
up paying for it. It sounds nice. We all like that,
make the bill, make the naughty people pay. But there's
some fundamental details there. You know. If the insurance industry
(03:55):
is not rushing in to say that's that's fine with us,
then I still have major questions of exactly how this
is going to work.
Speaker 2 (04:01):
Yeah, totally all right, let's see what they come up with.
We'll have to wait for Chris Pink to figure it out.
Thank you so much to know I appreciate it. Jenetib Shraney,
the Herald's Welling and Business editor.
Speaker 1 (04:09):
For more from News Talk st B, listen live on
air or online, and keep our shows with you wherever
you go with our podcasts on iHeartRadio
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