Liability changes and BCA reform announced

In 2024, the Government signalled that it would investigate changes to liability settings for the building and construction sector, as well as BCA reform.

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. 

The Government will investigate a range of supporting mechanisms to ensure building owners can protect their interests in the event of defective work, including through mandatory home warranties with an option for informed opt out, and a deposit security.

In addition, the Government has agreed to a suite of initiatives that will make it easier for council BCAs to group together to deliver their building consent functions and services, known as voluntary consolidation. To achieve this, the Government will make changes to the Building Act 2004 and associated regulations to remove regulatory barriers and streamline processes, making it easier for Councils to share services or transfer their consenting functions to other BCAs. Voluntary consolidation is expected to boost the efficiency of the consenting system, delivering more efficient and consistent decision-making across the country.

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.

Further information on these changes for the sector will be available soon.