Malcolm Fleming: Certified Builders Association CEO on the introduction of mandatory home warranties

A construction sector voice says mandatory home warranties are well overdue.

The Government's announced plans to require warranties for new homes three storeys or less and all renos worth at least $100,000.

Building and Construction Minister Chris Penk says it hopes to protect homeowners from cowboys.

Certified Builders Association Chief Executive Malcolm Fleming told Ryan Bridge it will cost more, but only marginally.

He says it will make up 0.4% of a $200,000 project.

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Episode Transcript

Speaker 1 (00:00):
Compulsory building warranties. Government's moving on this. They say they
want to protect us from cowboys. So renovation work costing
more than one hundred thousand dollars, you'll need a compulsory warranty,
Thank you very much. All new houses under four stories
you'll need a compulsory warranty, Thank you very much. Malcolm
Fleming is New Zealand Certified Builders CEO joining us now. Hey, Malcolm, good.

Speaker 2 (00:21):
Morning, Ryan, good move, Yes, very positive move. This has
been some industry has been caring or for as long
as I've been in these sort of roles, and that's
over a decade.

Speaker 1 (00:30):
How many properties are being built right now that don't
have warranties?

Speaker 2 (00:35):
I look at the membership in his own Certified Builders.
Even though one hundred percent of our twenty three hundred
members can offer a guarantee, only about forty two percent
of our building contracts have a guarantee attached to them.
So that's sort of magnitude.

Speaker 1 (00:51):
How much extra will it cost to add that to
the contract?

Speaker 2 (00:55):
What depends on the size of the project. At the
very low level of two undred thousand dollars, it's about
zero point fourty percent. One just sort of get into
sort of closer millions, like zero point one three percent.

Speaker 1 (01:08):
What does it cover?

Speaker 2 (01:11):
It covers defects for a year and also structural structure
for ten years, so it's a ten year quite comprehensive guarantee.

Speaker 1 (01:19):
What are defects?

Speaker 2 (01:21):
Defects are those sort of issues that need to be
sort of tidied up close to the completion of the
build well structure are more deep bedded ones, for example,
water ingress, all of the bees movement in the actual
structure itself.

Speaker 1 (01:39):
Why haven't you say only forty percent of certified builders
actually put this into their contracts. Now, why wouldn't they
the rest of them put them in do you think?
Is it just because they want to be as competitive
on cost as they can be.

Speaker 2 (01:51):
So, just to be really clear, this is a product
that a homeowner pays for they're a builder, so there
isn't that it's not going on to all the contracts.
Is that either the builder is not offering it to homeowner,
so that's certainly part of it, or it is offered
to homeown the homeowner saying no, I won't pay that
additional thousand dollars or whatever it might be, depending on

(02:13):
the cost of the project. I'm going to spend that
somewhere else.

Speaker 1 (02:17):
So your advice would be, if it's not offered to you,
ask for it.

Speaker 2 (02:22):
Very much so the moment and what was announced yesterday
that once the regulation is in place and there's a
timeline of that which looking probably abound twenty twenty seven
for us to be in place, that'll be mandatory for
a homeowner for the side type of projects we talked
about earlier, to have a home warranty product of some

(02:44):
type in place.

Speaker 1 (02:45):
And until then ask for it. That's the advice. Appreciate
your time this morning, Malcolm. Thank you Malcolm Fleming, and
you said on Certified Build as CEO.

Speaker 2 (02:53):
For more from early edition with Ryan Bridge. Listen live
to News Talks it be from five am weekdays, or
of the podcast on iHeartRadio