Government delivers major building system reform

The Government has agreed to change the building and construction sector’s liability settings from joint and several liability to proportionate liability and is making it easier for Building Consent Authorities (BCA) to voluntarily consolidate their functions.

Under the current joint and several liability settings, when things go wrong councils and ratepayers can be the ambulance at the bottom of the cliff left to cover the full cost of defective building work, even if they only played a small part in it.

Moving to proportionate liability will mean that parties involved in defective work will only be responsible for covering the costs of their own contribution, rather than the costs incurred by companies or individuals who are responsible for defective work but cannot pay to remedy it. This will support more personal responsibility in the building system, while lowering the chances of financial burdens falling on councils and ratepayers.

A draft Bill covering liability setting changes and measures to enable BCA voluntary consolidation will be introduced to Parliament in early 2026. Until the Bill is passed, the current liability and BCA settings remain in place.