1 00:00:01,400 --> 00:00:03,160 Speaker 1: With a warning for homeowners if you want to do 2 00:00:03,200 --> 00:00:05,440 Speaker 1: the building in the renos and stuff like that, you 3 00:00:05,760 --> 00:00:07,600 Speaker 1: could be the one exposed to covering the cost of 4 00:00:07,640 --> 00:00:10,280 Speaker 1: the dodgy work on your properties once the overall of 5 00:00:10,280 --> 00:00:13,600 Speaker 1: the Building Act is complete. The Herald's Wellington Business editor 6 00:00:13,640 --> 00:00:15,600 Speaker 1: g Native Trainey has been looking into this and is 7 00:00:15,640 --> 00:00:18,880 Speaker 1: with us now. Hijena hey, Heather, Happy New year. 8 00:00:19,000 --> 00:00:19,200 Speaker 2: Now. 9 00:00:20,160 --> 00:00:21,800 Speaker 1: I thought we were all going to be forced to 10 00:00:21,800 --> 00:00:24,240 Speaker 1: buy warranties and so we would be covered. What's going on. 11 00:00:25,920 --> 00:00:29,440 Speaker 2: That's right. When the government announced last year changes major 12 00:00:29,520 --> 00:00:32,720 Speaker 2: changes to the Building Act, it said that consumers or 13 00:00:32,760 --> 00:00:36,400 Speaker 2: how homeowners would be protected because under a shift in 14 00:00:37,120 --> 00:00:41,000 Speaker 2: the liability regime, we'd all have to buy warranties or 15 00:00:41,080 --> 00:00:43,600 Speaker 2: insurance on the building work that we get done. Like 16 00:00:43,600 --> 00:00:45,080 Speaker 2: if you build a house, you have to buy a 17 00:00:45,080 --> 00:00:50,040 Speaker 2: warranty or get insurance. That was quite a controversial call 18 00:00:50,080 --> 00:00:52,440 Speaker 2: at the time because the government has looked at this 19 00:00:52,520 --> 00:00:55,040 Speaker 2: stuff in the past and in the past, for example 20 00:00:55,080 --> 00:01:00,600 Speaker 2: in twenty nineteen, MB and others who who experts in 21 00:01:00,640 --> 00:01:03,000 Speaker 2: this area, they said, the problem with this is is 22 00:01:03,040 --> 00:01:06,039 Speaker 2: that you can't guarantee that the insurance industry will be 23 00:01:06,200 --> 00:01:09,800 Speaker 2: there to provide these sorts of products. You know, you 24 00:01:09,840 --> 00:01:14,640 Speaker 2: can't force the private sector to provide cover, especially in 25 00:01:14,680 --> 00:01:16,760 Speaker 2: the building sector, you know, which has had a rocky 26 00:01:16,840 --> 00:01:19,840 Speaker 2: history with leaky homes. And in the past you've had 27 00:01:19,920 --> 00:01:23,399 Speaker 2: Lloyds of London's underwrite insurance products in New Zealand and 28 00:01:23,400 --> 00:01:26,199 Speaker 2: they've left the market because they've deemed it to be, 29 00:01:26,560 --> 00:01:30,080 Speaker 2: you know, too risky and they've just said no, thank you. 30 00:01:30,160 --> 00:01:33,360 Speaker 2: So that there's always been that question mark, you know, 31 00:01:33,400 --> 00:01:35,959 Speaker 2: you can't really force people to get the stuff because 32 00:01:36,000 --> 00:01:37,839 Speaker 2: it might not be there or might be too expensive. 33 00:01:38,240 --> 00:01:41,800 Speaker 2: So knowing that the government quietly said, yes, it's going 34 00:01:41,840 --> 00:01:44,959 Speaker 2: to make these things mandatory, but it's giving itself an 35 00:01:44,959 --> 00:01:48,040 Speaker 2: out and it's saying that if these products are no 36 00:01:48,120 --> 00:01:51,160 Speaker 2: longer available or are too expensive, there will no longer 37 00:01:51,200 --> 00:01:54,720 Speaker 2: be that requirement for you to have them. Now, it 38 00:01:54,760 --> 00:01:57,160 Speaker 2: all gets a bit complicated, but the reason that is 39 00:01:57,200 --> 00:02:00,560 Speaker 2: important is that under the new liability regime, if there 40 00:02:00,640 --> 00:02:05,360 Speaker 2: is a problem with your home, you can pursue the builder. 41 00:02:05,400 --> 00:02:08,440 Speaker 2: You have to pursue whoever's faulted is. You can't just 42 00:02:08,520 --> 00:02:11,280 Speaker 2: pursue the council and get them to pay you. So 43 00:02:11,320 --> 00:02:14,560 Speaker 2: if there's no, if they suspend the warranties, there's no warranties, 44 00:02:14,840 --> 00:02:18,720 Speaker 2: you can't pursue the council anymore. Then you know that 45 00:02:18,840 --> 00:02:19,919 Speaker 2: cost could fall on you. 46 00:02:20,360 --> 00:02:25,280 Speaker 1: Are they not only postponing the mandatory component of the warranties, 47 00:02:25,320 --> 00:02:27,240 Speaker 1: Like you can still go out and get a warranty, 48 00:02:27,280 --> 00:02:28,240 Speaker 1: you're just not forced to. 49 00:02:29,919 --> 00:02:33,720 Speaker 2: Yeah, that's right, that is right. So you know, if 50 00:02:33,720 --> 00:02:36,880 Speaker 2: it's you and you're building your home and you realize, 51 00:02:37,560 --> 00:02:39,600 Speaker 2: oh man, you know, like if there's a problem and 52 00:02:39,680 --> 00:02:41,880 Speaker 2: the builder goes bust and I don't have a warranty, 53 00:02:41,919 --> 00:02:44,280 Speaker 2: then I'm going to be stuck with the problem. Then 54 00:02:44,360 --> 00:02:47,079 Speaker 2: you know, you might decide you're going to get a warranty. 55 00:02:47,320 --> 00:02:49,000 Speaker 2: But the problem is, as if I go out and 56 00:02:49,040 --> 00:02:51,760 Speaker 2: buy a house, I might not necessarily know that the 57 00:02:51,800 --> 00:02:55,360 Speaker 2: person who had it built didn't have a warranty on 58 00:02:55,400 --> 00:02:57,600 Speaker 2: the building work. So I buy a house and then 59 00:02:57,680 --> 00:03:00,320 Speaker 2: something goes wrong, I try to pursue the builder, it's 60 00:03:00,320 --> 00:03:03,760 Speaker 2: gone bus. There's no warranty, you know. And and just 61 00:03:03,800 --> 00:03:06,959 Speaker 2: given how much money New Zealanders have invested in property 62 00:03:07,080 --> 00:03:09,360 Speaker 2: and how many problems they have been in the past, 63 00:03:09,800 --> 00:03:14,320 Speaker 2: I think there is a slight you know, risk of exposure. 64 00:03:14,360 --> 00:03:16,280 Speaker 1: There's definitely a risk yet. But so this will just 65 00:03:16,280 --> 00:03:17,840 Speaker 1: turn into one of those things you have to do 66 00:03:17,919 --> 00:03:19,840 Speaker 1: due diligence on before you buy a property or when 67 00:03:19,840 --> 00:03:21,040 Speaker 1: you're buying a property, right. 68 00:03:21,680 --> 00:03:23,359 Speaker 2: Yeah, you know, I'd say so. And you know it's 69 00:03:23,360 --> 00:03:25,320 Speaker 2: just one more thing you checking the risk of the 70 00:03:25,320 --> 00:03:29,320 Speaker 2: flood resk and insurance. This is one more thing now 71 00:03:29,560 --> 00:03:31,800 Speaker 2: there isn't the other there, you know, another side to it. 72 00:03:31,840 --> 00:03:34,720 Speaker 2: So the government would say that because it's changing the 73 00:03:34,720 --> 00:03:37,600 Speaker 2: liability regime, whoever is responsible for the problem, be it 74 00:03:37,680 --> 00:03:41,400 Speaker 2: the architect, the builder, whoever, because they're going to be responsible. 75 00:03:43,320 --> 00:03:45,560 Speaker 2: You know, they're going to have to lift their lift 76 00:03:45,600 --> 00:03:51,240 Speaker 2: their game because in order for for insurers to ensure 77 00:03:51,280 --> 00:03:54,080 Speaker 2: the building work or for you to get a warranty, 78 00:03:54,840 --> 00:03:56,960 Speaker 2: those builders are going to have to, you know, meet 79 00:03:57,000 --> 00:04:00,480 Speaker 2: a certain standard because if they don't, if they're not 80 00:04:00,480 --> 00:04:02,680 Speaker 2: good enough to become part of master Builders, or they're 81 00:04:02,720 --> 00:04:06,080 Speaker 2: not good enough to know to tell the ensurer that 82 00:04:06,640 --> 00:04:09,280 Speaker 2: please ensure my work, then they're not going to get 83 00:04:09,280 --> 00:04:12,160 Speaker 2: any business. So the government's argument is it's actually going 84 00:04:12,240 --> 00:04:17,080 Speaker 2: to be okay because this whole change in liability will 85 00:04:17,240 --> 00:04:19,960 Speaker 2: will lift their game. So I think that's sort of 86 00:04:20,000 --> 00:04:21,680 Speaker 2: a fair counterpoint. 87 00:04:21,560 --> 00:04:23,039 Speaker 1: And it's good to talk to you as always, Jenay, 88 00:04:23,040 --> 00:04:25,920 Speaker 1: thanks very much for that. Janetibcherani, who is our Wellington 89 00:04:25,920 --> 00:04:26,640 Speaker 1: Business editor. 90 00:04:27,400 --> 00:04:30,560 Speaker 2: For more from Heather Duplessy Allen Drive, listen live to 91 00:04:30,680 --> 00:04:31,200 Speaker 2: news Talks. 92 00:04:31,200 --> 00:04:34,400 Speaker 1: It'd be from four pm weekdays, or follow the podcast 93 00:04:34,520 --> 00:04:35,520 Speaker 1: on iHeartRadio.