October 8, 2024 • 7 mins
Penalties could be on the cards for careless builders as the Government looks to strengthen professional requirements.
It's eyeing key changes to the registration and licensing regimes, with a focus on lifting competence and accountability requirements; as well as improving Building Act consumer protections.
Building and Construction Minister Chris Penk confirms it's also looking into a new offence for deliberately hiding non-compliant building work in remote inspections.
That would mean a $50,000 fine for individuals or $150,000 for businesses, should it become law.
Kerre Woodham is joined by Master Builders Chief Executive Ankit Sharma to discuss further.
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Episode Transcript
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Speaker 1 (00:06):
You're listening to the carrywood of morning's podcast from News
Talks d B.
Speaker 2 (00:11):
As we have been discussing penalties could be on the
cards for careless builders as the government looks to strengthen
professional requirements, de eyeing changes to the registration and licensing
regimes with a focus on lifting competency and accountability requirements
and improving Building Act Consumer Protections. Building and Construction Minister
Chris Penk confirms the governments also looking into a new
(00:34):
offense for deliberately hiding non compliant building work in remote inspections.
That would mean a fifty thousand dollar fine for individuals
or a one hundred and fifty thousand dollars fine for
businesses should it become law. I'm joined now by Master
Builder's chief executive an Kit Sharma. Good morning to you,
Good morning care I can't see the fines making a
(00:57):
blind bit of difference as a deterrent acting as a deterrent.
Speaker 3 (01:05):
Think on their own, no, But I think for us,
our viewers, to address housing shortage, we need to find
a way to build quality homes better, faster and cheaper.
To do that, you have to do three things. We
have to improve standards, we need to make sure we've
got good building businesses and good regulatory oversight. And I
(01:27):
think for us we support raising both the standards and penalties.
So for me, penalties on their own, I think we'll
probably not achieve the outcome we are looking to achieve.
But if we get to a situation where we are
really looking at the skills people need and the license
they need before they can get into buildings, especially to
(01:48):
get in a position where they can undertake a complete
bill the standards you have to comply to, I think
penalty becomes a good supporting mechanism to hinder people from
cutting corners.
Speaker 2 (01:59):
Ideally, absolutely you would raise that bar that they're talking about.
But when it comes to raising the bar, are we
talking about raising the bar in terms of apprentices being
better trained? Or are we talking about raising the bar
when it comes to giving new New Zealanders licenses to build.
Speaker 3 (02:18):
It has to be both. So we need to we
need to and as a part of this consultation, and
I think that's an opportunity for us as an industry
to provide inputs. So we will like the standards to
raise across the whole lot. So we need to make
sure we get better apprentice training. We need to make
sure there's good licensing requirements, so you need to have
time and business and other stuff which our industry has
(02:40):
been calling for. So when you're getting a builder who's
a licensed builder, the homeowners can get some assurance they've
got some experience and some standards behind them. And I
think all of that has to be work with along
with making sure we've got good standards which are fit
for purpose for some of the challenges we have around
you know, materials, resilience. We've got a lot of damage
(03:04):
coming from climate and some of the incidents which are happening.
So I think you're right. It has to be around
improving the standards of training, licensing mechanism, and we also
need to continue improving the building standards.
Speaker 2 (03:15):
But that's going to take time, and that's what we
don't have. The very point of the of the you know,
fast tracking mechanisms is to speed things up. This sounds
like a disaster, especially like I've only ever had good
experience with builders. But the stories we hear, and this
is not the first time I've heard them of shonky
shonky workmanship, dangerous workmanship of you know, the corruption within
(03:41):
the within the industry as well are terrifying.
Speaker 3 (03:44):
Yeah, and I and I think would be important for
me to highlight said so, on an average, the builders
do a very good job, and we well, we need
to find a way to reduce failures in the industry,
any industry. We need to continue to improve standards. And
you're absolutely right. When you have small number of builders
who fail, then pack their creator is quite significant and
(04:05):
there are a lot of mechanism, So I think there's
a there's there's only so much and you're right when
you talk about regulation and standard there's only so much
you can do, and some of these changes take time.
In this wee needs to take responsibility and I think
we need to do more education to homeowners around doing
due diligence when they're choosing a builder, both around the
(04:25):
quality of their previous work, also around their financial stability.
So we see a lot of issues happen when builders
get into financial strength and then and the outcome of
that is then the start getting corners and in the
worst case scenarios, you can end up having homeowners left
in an incomplete home. So I think it's as much
as we need to improve the standard, we also need
(04:46):
to start creating more education to homeowners around doing good
due diligence. Make sure you get some external advice, make
sure you do and look at financial health and resilience
of the building you're picking up. And also if if
you've got options, if you're using a master builder and
some other organizations who've got products like mscile book anti
and insurance to kind of back it. So I think
(05:08):
it's a combination of all of that system working together
which will improve the quality and it will be a
better step from where we are. Regulation is just part
of them.
Speaker 2 (05:17):
How do you check a builder's due diligence. I mean,
I've never thought to check, and so I suppose I've
been lucky. But I mean I've gone with recommendations from
architects and friends and it's been great. You know, they've
been really lovely people to have in the house and
done great work. But how do you check their financial
diligence and how do you go about checking their previous work.
Speaker 3 (05:40):
I look, I fully support that I did some renovations
now three or four years back. Looking back, I absolutely
did not due diligence on financial resilience of the building.
It's only after I paid quite a lot of deposit,
and I was thinking, you know, I hope that you
know the builder will come through. So I think the
first step is what you said, you know, the best
way to get good advice on a builder is other
people's experiences. To go and speak to your friends and family,
(06:03):
get people you know they've done good job. I think
the second one, which is very important, is make sure
that they the builder when they're talking about doing a
particular project, they have experience in doing that. So I
think it's extremely important when you're used to doing a
certain type of bill, you build up quality. You've got
a lot of experience in doing that. So I think
second is just making sure if you are getting some
(06:25):
due diligence, they've actually done the type of work you're
asking them to do. So renovating villa is quite a
different war than doing an extension and making sure you
do that. Financial resilience, so there are two areas in
financial resilience. So one is there are organizations like credit Works.
They provide credit ratings, and these credit ratings are based
(06:45):
on how these builders are paying their bills. It's actually
quite a good indicator if the business is operating in
good health. So if the credit score drops, the potentially
can be an indication that the business is struggling, and
you can go to organizations like Credit Work, pay a
small amount and do a credit check, and I think
that's quite a good tool. It's heading enough. At master Builders.
(07:08):
We are currently working through to introduce something called a
financial writing so for master Builders in future you'll be
able to go and look at their financial writing and
their financial strength, where we're actually looking at how they're
running their business. So I think finance is a bit
we probably need to do more education. But even if
people go and reach out to their friends and family
get advice, don't feel that their you know, builders are
(07:31):
scared and they just have to lock somebody in. I
think that's an important step and I think the Mikey
message will be cheaper is not always best in the
long term. So if you get a code which just
sounds too good to be true, it's very likely it is.
So make sure you get some external advice, make sure
you get two or three codes and make a decision
which you know feels more right.
Speaker 2 (07:52):
Thank you so much, John ki Chama and Master Builder's
chief executive.
Speaker 1 (07:56):
For more from Kerry Wooden Mornings, listen live to news
talks it'd be from nine am weekdays, or follow the
podcast on iHeartRadio
You're listening to the carrywood of morning's podcast from News
Talks d B.
Speaker 2 (00:11):
As we have been discussing penalties could be on the
cards for careless builders as the government looks to strengthen
professional requirements, de eyeing changes to the registration and licensing
regimes with a focus on lifting competency and accountability requirements
and improving Building Act Consumer Protections. Building and Construction Minister
Chris Penk confirms the governments also looking into a new
(00:34):
offense for deliberately hiding non compliant building work in remote inspections.
That would mean a fifty thousand dollar fine for individuals
or a one hundred and fifty thousand dollars fine for
businesses should it become law. I'm joined now by Master
Builder's chief executive an Kit Sharma. Good morning to you,
Good morning care I can't see the fines making a
(00:57):
blind bit of difference as a deterrent acting as a deterrent.
Speaker 3 (01:05):
Think on their own, no, But I think for us,
our viewers, to address housing shortage, we need to find
a way to build quality homes better, faster and cheaper.
To do that, you have to do three things. We
have to improve standards, we need to make sure we've
got good building businesses and good regulatory oversight. And I
(01:27):
think for us we support raising both the standards and penalties.
So for me, penalties on their own, I think we'll
probably not achieve the outcome we are looking to achieve.
But if we get to a situation where we are
really looking at the skills people need and the license
they need before they can get into buildings, especially to
(01:48):
get in a position where they can undertake a complete
bill the standards you have to comply to, I think
penalty becomes a good supporting mechanism to hinder people from
cutting corners.
Speaker 2 (01:59):
Ideally, absolutely you would raise that bar that they're talking about.
But when it comes to raising the bar, are we
talking about raising the bar in terms of apprentices being
better trained? Or are we talking about raising the bar
when it comes to giving new New Zealanders licenses to build.
Speaker 3 (02:18):
It has to be both. So we need to we
need to and as a part of this consultation, and
I think that's an opportunity for us as an industry
to provide inputs. So we will like the standards to
raise across the whole lot. So we need to make
sure we get better apprentice training. We need to make
sure there's good licensing requirements, so you need to have
time and business and other stuff which our industry has
(02:40):
been calling for. So when you're getting a builder who's
a licensed builder, the homeowners can get some assurance they've
got some experience and some standards behind them. And I
think all of that has to be work with along
with making sure we've got good standards which are fit
for purpose for some of the challenges we have around
you know, materials, resilience. We've got a lot of damage
(03:04):
coming from climate and some of the incidents which are happening.
So I think you're right. It has to be around
improving the standards of training, licensing mechanism, and we also
need to continue improving the building standards.
Speaker 2 (03:15):
But that's going to take time, and that's what we
don't have. The very point of the of the you know,
fast tracking mechanisms is to speed things up. This sounds
like a disaster, especially like I've only ever had good
experience with builders. But the stories we hear, and this
is not the first time I've heard them of shonky
shonky workmanship, dangerous workmanship of you know, the corruption within
(03:41):
the within the industry as well are terrifying.
Speaker 3 (03:44):
Yeah, and I and I think would be important for
me to highlight said so, on an average, the builders
do a very good job, and we well, we need
to find a way to reduce failures in the industry,
any industry. We need to continue to improve standards. And
you're absolutely right. When you have small number of builders
who fail, then pack their creator is quite significant and
(04:05):
there are a lot of mechanism, So I think there's
a there's there's only so much and you're right when
you talk about regulation and standard there's only so much
you can do, and some of these changes take time.
In this wee needs to take responsibility and I think
we need to do more education to homeowners around doing
due diligence when they're choosing a builder, both around the
(04:25):
quality of their previous work, also around their financial stability.
So we see a lot of issues happen when builders
get into financial strength and then and the outcome of
that is then the start getting corners and in the
worst case scenarios, you can end up having homeowners left
in an incomplete home. So I think it's as much
as we need to improve the standard, we also need
(04:46):
to start creating more education to homeowners around doing good
due diligence. Make sure you get some external advice, make
sure you do and look at financial health and resilience
of the building you're picking up. And also if if
you've got options, if you're using a master builder and
some other organizations who've got products like mscile book anti
and insurance to kind of back it. So I think
(05:08):
it's a combination of all of that system working together
which will improve the quality and it will be a
better step from where we are. Regulation is just part
of them.
Speaker 2 (05:17):
How do you check a builder's due diligence. I mean,
I've never thought to check, and so I suppose I've
been lucky. But I mean I've gone with recommendations from
architects and friends and it's been great. You know, they've
been really lovely people to have in the house and
done great work. But how do you check their financial
diligence and how do you go about checking their previous work.
Speaker 3 (05:40):
I look, I fully support that I did some renovations
now three or four years back. Looking back, I absolutely
did not due diligence on financial resilience of the building.
It's only after I paid quite a lot of deposit,
and I was thinking, you know, I hope that you
know the builder will come through. So I think the
first step is what you said, you know, the best
way to get good advice on a builder is other
people's experiences. To go and speak to your friends and family,
(06:03):
get people you know they've done good job. I think
the second one, which is very important, is make sure
that they the builder when they're talking about doing a
particular project, they have experience in doing that. So I
think it's extremely important when you're used to doing a
certain type of bill, you build up quality. You've got
a lot of experience in doing that. So I think
second is just making sure if you are getting some
(06:25):
due diligence, they've actually done the type of work you're
asking them to do. So renovating villa is quite a
different war than doing an extension and making sure you
do that. Financial resilience, so there are two areas in
financial resilience. So one is there are organizations like credit Works.
They provide credit ratings, and these credit ratings are based
(06:45):
on how these builders are paying their bills. It's actually
quite a good indicator if the business is operating in
good health. So if the credit score drops, the potentially
can be an indication that the business is struggling, and
you can go to organizations like Credit Work, pay a
small amount and do a credit check, and I think
that's quite a good tool. It's heading enough. At master Builders.
(07:08):
We are currently working through to introduce something called a
financial writing so for master Builders in future you'll be
able to go and look at their financial writing and
their financial strength, where we're actually looking at how they're
running their business. So I think finance is a bit
we probably need to do more education. But even if
people go and reach out to their friends and family
get advice, don't feel that their you know, builders are
(07:31):
scared and they just have to lock somebody in. I
think that's an important step and I think the Mikey
message will be cheaper is not always best in the
long term. So if you get a code which just
sounds too good to be true, it's very likely it is.
So make sure you get some external advice, make sure
you get two or three codes and make a decision
which you know feels more right.
Speaker 2 (07:52):
Thank you so much, John ki Chama and Master Builder's
chief executive.
Speaker 1 (07:56):
For more from Kerry Wooden Mornings, listen live to news
talks it'd be from nine am weekdays, or follow the
podcast on iHeartRadio
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